Question

A
company has an expected dividend D1 of $3.00 per share. Its growth
rate is 4%, its common stock now sells for $36. New external equity
can be sold to net price of 32.40 per share.

Find:

a. cost of retained earnings

b. percentage flotation cost

c. cost of new common stock

Answer #1

The Evanec Company's next expected dividend, D1, is $2.70; its
growth rate is 5%; and its common stock now sells for $36. New
stock (external equity) can be sold to net $30.60 per share. What
is Evanec's cost of retained earnings, rs? Round your answer to two
decimal places. rs = %
What is Evanec's percentage flotation cost, F? Round your answer
to two decimal places. F = %
What is Evanec's cost of new common stock, re? Round your...

The Evanec Company's next expected dividend, D1, is
$3.97; its growth rate is 4%; and its common stock now sells for
$38.00. New stock (external equity) can be sold to net $36.10 per
share.
What is Evanec's cost of retained earnings, rs? Do
not round intermediate calculations. Round your answer to two
decimal places.
rs = %
What is Evanec's percentage flotation cost, F? Round your answer
to two decimal places.
F = %
What is Evanec's cost of new common stock,...

The Evanec Company's next expected dividend, D1, is
$3.74; its growth rate is 5%; and its common stock now sells for
$37. New stock (external equity) can be sold to net $33.30 per
share.
What is Evanec's cost of retained earnings, rs?
Round your answer to two decimal places. Do not round your
intermediate calculations.
rs = %
What is Evanec's percentage flotation cost, F? Round your
answer to two decimal places.
F = %
What is Evanec's cost of new common...

P10.07
The Evanec Company's next expected dividend, D1, is $3.66; its
growth rate is 7%; and its common stock now sells for $39. New
stock (external equity) can be sold to net $33.15 per share.
A. What is Evanec's cost of retained earnings, rs? Round your
answer to two decimal places. Do not round your intermediate
calculations. rs = %
B. What is Evanec's percentage flotation cost, F? Round your
answer to two decimal places. F = %
C. What...

The Evanec Company's next expected dividend, D1, is
$3.90; its growth rate is 7%; and its common stock now sells for
$33.00. New stock (external equity) can be sold to net $26.40 per
share.
What is Evanec's cost of retained earnings, rs? Do
not round intermediate calculations. Round your answer to two
decimal places.
rs = %
What is Evanec's percentage flotation cost, F? Round your answer
to two decimal places.
F = %
What is Evanec's cost of new common stock,...

Question 3
a)
The Evanec Company's next expected dividend, D1, is $3.63; its
growth rate is 5%; and its common stock now sells for $30. New
stock (external equity) can be sold to net $25.50 per share.
What is Evanec's cost of retained earnings, rs? Round your
answer to two decimal places.
What is Evanec's percentage flotation cost, F? Round your answer
to two decimal places.
What is Evanec's cost of new common stock, re? Round your answer
to two...

Trahern Baking Co. common stock sells for $33.45 per share. It
expects to earn $3.00 per share during the current year, its
expected dividend payout ratio is 60%, and its expected constant
dividend growth rate is 6.0%. New stock can be sold to the public
at the current price, but a flotation cost of 4.5% would be
incurred. What would be the cost of equity from new common stock?
19.57% 21.08% 21.70% 15.78% 14.05%

LePage Co. expects to earn $2.50 per share during the current
year, its expected dividend payout ratio is 65%, its expected
constant dividend growth rate is 6.0%, and its common stock
currently sells for $24.75 per share. New stock can be sold to the
public at the current price, but a flotation cost of 9% would be
incurred. What would be the cost of equity from new common
stock?

Yasheen Company expects to earn $3.50 per share during the
current year, its expected dividend payout ratio is 66%, its
expected constant dividend growth rate is 6.0%, and its common
stock currently sells for $32.50 per share. 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 equity from new common
stock? a. 13.37% b. 13.70% c. 13.98% d. 13.74% e. 13.48%

1. Banyan Co.’s common stock currently sells for $35.25 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 5% would be incurred. What would be the
cost of new equity? Do not round intermediate calculations. Round...

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