Klints Inc. paid an annual dividend of $1.25 last year. The firm's stock sells for $30.50...
Klints Inc. paid an annual dividend of $1.25 last year. The firm's stock sells for $30.50 per share, and the company is expected to grow at about 4% per year into the foreseeable future. Estimate Klints' cost of retained earnings. Round the answer to two decimal places. Do not round intermediate calculations. ___% _____________________________
Harris Inc.'s preferred stock was issued five years ago to yield 9%. Investors buying those shares on the secondary market today are getting a 14% return. Harris generally pays flotation costs of 13.5% on new securities issues. What is Harris's cost of preferred financing? Round the answer to two decimal places. ____%
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Homework Answers
![Price = D1 = $30.50 [ 1.25*1.04] D1/(ke-g) = $1.30 4.00% 4.26% 8.26% ke-g = ( 1.30/30.50] (4.0%+4.26% ] ke= cost of retained](http://img.homeworklib.com/questions/f2371310-75ac-11ea-a657-0565a395d3f9.png?x-oss-process=image/resize,w_560)
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Klints Inc. paid an annual dividend of $1.25 last year. The
firm's stock sells for $30.50...
Klints Inc. paid an annual dividend of $1.45 last year. The firm's stock sells for $31.50...
Klints Inc. paid an annual dividend of $1.45 last year. The firm's stock sells for $31.50 per share, and the company is expected to grow at about 4% per year into the foreseeable future. Estimate Klints' cost of retained earnings. Round the answer to two decimal places. Do not round intermediate calculations
Edna Recording Studios, Inc., reported earnings available to common stock of $4 ,400,000 last year. From...
Edna Recording Studios, Inc., reported earnings available to common stock of $4 ,400,000 last year. From those earnings, the company paid a dividend of $1.26 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 30% debt, 25% preferred stock, and 45% common stock. It is taxed at a rate of 21%. a. If the market price of the common stock is $43 and dividends are expected to grow at a rate of 6% per...
Cost of capital Edna Recording Studios, Inc., reported earnings available to common stock of $5,000,000 last...
Cost of capital Edna Recording Studios, Inc., reported earnings available to common stock of $5,000,000 last year. From those earnings, the company paid a dividend of $1.28 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 25%debt, 10% preferred stock, and 65% common stock. It is taxed at a rate of 40%. a. If the market price of the common stock is $36 and dividends are expected to grow at a rate of 7%per...
McCracken Roofing, Inc., common stock paid a dividend of $1.29 per share last year. The company...
McCracken Roofing, Inc., common stock paid a dividend of $1.29 per share last year. The company expects earnings and dividends to grow at a rate of 9% per year for the foreseeable future. a.What required rate of return for this stock would result in a price per share of $28? b. If McCracken expects both earnings and dividends to grow at an annual rate of 11%, what required rate of return would result in a price per share of $28?...
Cost of capital Edra Recording Studios, Inc., reported earnings available to common stock of S4 400.000...
Cost of capital Edra Recording Studios, Inc., reported earnings available to common stock of S4 400.000 last year. From those earnings, the company paid a dividend of $1.32 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 30% debt, 10% proferred stock, and 60% common stock. It is taxed at a rate of 28% a. "the market price of the common stock is $32 and dividends are expected to grow at a rate of...
Cost of capital Edna Recording Studios Inc. reported earnings available to common stock of $4,200,000 last...
Cost of capital Edna Recording Studios Inc. reported earnings available to common stock of $4,200,000 last year. From those earnings, the company paid a dividend of $1.26 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 40% debt, 10% preferred stock, and 50% common stock. It is taxed at a rate of 21%. If the market price of the common stock is $40 and dividends are expected to grow at a rate of 6%...
Cost of capital Edna Recording Studios, Inc., reported earnings available to common stock of $4,4...
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Cost of capital Edna Recording Studios, Inc., reported earnings available to common stock of $4,400,000 last year. From those earnings, the company paid a dividend of $1.19 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 35% debt, 25% preferred stock, and 40% common stock. t is taxed at a rate of 27%. a. If the market price of the common stock is $31 and dividends are expected to...
Last year the Black Water Inc. paid dividends $3.17. Company's dividends are expected to grow at...
Last year the Black Water Inc. paid dividends $3.17. Company's dividends are expected to grow at an annual rate of 5% forever. The company's common stock is currently selling on the market for $68.93. The investments banker will charge flotation costs $2.67 per share. Calculate the cost of common equity financing using Gordon Model. Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box).
Holtzman Clothiers's stock currently sells for $33 a share. It just paid a dividend of $1.25...
Holtzman Clothiers's stock currently sells for $33 a share. It just paid a dividend of $1.25 a share (i.e., DO = $1.25). The dividend is expected to grow at a constant rate of 4% a year. a) What stock price is expected 1 year from now? Round your answer to two decimal places. b) What is the required rate of return? Round your answer to two decimal places. Do not round your intermediate calculations
Javits & Sons' common stock currently trades at $33.00 a share. It is expected to pay an annual dividend of $1.25 a...
Javits & Sons' common stock currently trades at $33.00 a share. It is expected to pay an annual dividend of $1.25 a share at the end of the year (D1 = $1.25), and the constant growth rate is 4% a year. A) What is the company's cost of common equity if all of its equity comes from retained earnings? Round your answer to two decimal places. % B) If the company were to issue new stock, it would incur a...
Cost of capital Edra Recording Studios, Inc., reported earnings available to common stock of S4 400.000 last year. From those earnings, the company paid a dividend of $1.32 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 30% debt, 10% proferred stock, and 60% common stock. It is taxed at a rate of 28% a. "the market price of the common stock is $32 and dividends are expected to grow at a rate of...
This is a sample question:
Cost of capital Edna Recording Studios, Inc., reported earnings available to common stock of $4,400,000 last year. From those earnings, the company paid a dividend of $1.19 on each of its 1,000,000 common shares outstanding. The capital structure of the company includes 35% debt, 25% preferred stock, and 40% common stock. t is taxed at a rate of 27%. a. If the market price of the common stock is $31 and dividends are expected to...
Last year the Black Water Inc. paid dividends $3.17. Company's dividends are expected to grow at an annual rate of 5% forever. The company's common stock is currently selling on the market for $68.93. The investments banker will charge flotation costs $2.67 per share. Calculate the cost of common equity financing using Gordon Model. Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box).
Holtzman Clothiers's stock currently sells for $33 a share. It just paid a dividend of $1.25 a share (i.e., DO = $1.25). The dividend is expected to grow at a constant rate of 4% a year. a) What stock price is expected 1 year from now? Round your answer to two decimal places. b) What is the required rate of return? Round your answer to two decimal places. Do not round your intermediate calculations
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