Question

Banyan Co.’s common stock currently sells for $60.75 per share. The growth rate is a constant 8%, and the company has an expected dividend yield of 4%. The expected long-run dividend payout ratio is 20%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 10% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your answer to two decimal places.

Answer #1

Banyan Co.’s common stock currently sells for $37.75 per share.
The growth rate is a constant 7%, and the company has an expected
dividend yield of 4%. The expected long-run dividend payout ratio
is 30%, and the expected return on equity (ROE) is 10.0%. New stock
can be sold to the public at the current price, but a flotation
cost of 10% would be incurred. What would be the cost of new
equity? Do not round intermediate calculations. Round your...

Banyan Co.’s common stock currently sells for $57.75 per
share. The growth rate is a constant 5%, and the company has an
expected dividend yield of 5%. The expected long-run dividend
payout ratio is 50%, and the expected return on equity (ROE) is
10.0%. New stock can be sold to the public at the current price,
but a flotation cost of 15% would be incurred. What would be the
cost of new equity? Do not round intermediate calculations. Round
your...

Banyan Co.’s common stock currently sells for $43.75 per share.
The growth rate is a constant 6%, and the company has an expected
dividend yield of 4%. The expected long-run dividend payout ratio
is 25%, and the expected return on equity (ROE) is 7%. New stock
can be sold to the public at the current price, but a flotation
cost of 10% would be incurred. What would be the cost of new
equity? Do not round intermediate calculations. Round your...

Banyan Co.’s common stock currently sells for $54.50 per share.
The growth rate is a constant 10.5%, and the company has an
expected dividend yield of 6%. The expected long-run dividend
payout ratio is 25%, and the expected return on equity (ROE) is
14%. New stock can be sold to the public at the current price, but
a flotation cost of 5% would be incurred. What would be the cost of
new equity? Round your answer to two decimal places....

Banyan Co.’s common stock currently sells for $47.75 per share.
The growth rate is a constant 9.8%, and the company has an expected
dividend yield of 5%. The expected long-run dividend payout ratio
is 30%, and the expected return on equity (ROE) is 14%. New stock
can be sold to the public at the current price, but a flotation
cost of 5% would be incurred. What would be the cost of new equity?
Round your answer to two decimal places....

Banyan Co.’s common stock currently sells for $35.75 per share.
The growth rate is a constant 9%, and the company has an expected
dividend yield of 2%. The expected long-run dividend payout ratio
is 25%, and the expected return on equity (ROE) is 12%. New stock
can be sold to the public at the current price, but a flotation
cost of 5% would be incurred. What would be the cost of new equity?
Round your answer to two decimal places....

Banyan Co.’s common stock currently sells for $39.75 per share.
The growth rate is a constant 9.1%, and the company has an expected
dividend yield of 4%. The expected long-run dividend payout ratio
is 35%, and the expected return on equity (ROE) is 14%. New stock
can be sold to the public at the current price, but a flotation
cost of 10% would be incurred. What would be the cost of new
equity? Round your answer to two decimal places....

Banyan Co.’s common stock currently sells for $46.25 per share.
The growth rate is a constant 10.8%, and the company has an
expected dividend yield of 3%. The expected long-run dividend
payout ratio is 40%, and the expected return on equity (ROE) is
18%. New stock can be sold to the public at the current price, but
a flotation cost of 15% would be incurred. What would be the cost
of new equity? Round your answer to two decimal places....

Banyan Co.’s common stock currently sells for $39.75 per share.
The growth rate is a constant 10.4%, and the company has an
expected dividend yield of 6%. The expected long-run dividend
payout ratio is 35%, and the expected return on equity (ROE) is
16%. New stock can be sold to the public at the current price, but
a flotation cost of 10% would be incurred. What would be the cost
of new equity? Round your answer to two decimal places....

COST OF COMMON EQUITY WITH FLOTATION
Banyan Co.’s common stock currently sells for $54.75 per share.
The growth rate is a constant 9.6%, and the company has an expected
dividend yield of 6%. The expected long-run dividend payout ratio
is 20%, and the expected return on equity (ROE) is 12%. New stock
can be sold to the public at the current price, but a flotation
cost of 15% would be incurred. What would be the cost of new
equity? Round...

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