What is cost of retained earnings

Assignment Help Financial Management
Reference no: EM131357336

A firm's stock is selling for $78. The next annual dividend is expected to be $4.00. The growth rate is 7%. The flotation cost is $7. What is the cost of retained earnings? (Round your answer to 2 decimal places.)

10.78%

13.58%

9.98%

12.13%

Reference no: EM131357336

Questions Cloud

Calculate rate of return on equity for each firm : Firms HL and LL are identical except for their financial leverage ratios and the interest rates they pay on debt. Each has $12 million in invested capital, has $2.4 million of EBIT, and is in the 40% federal-plus-state tax bracket. Calculate the retu..
Make the last of your forty investments : You have forty years until you retire. Today you have no investments. At the end of the year, you will make the first of 40 annual investments of $5,000 in an account that returns 7%, how much will you have on the day that you make the last of your f..
Standard deviation and coefficient of variation : The Neal Company wants to estimate next year's return on equity (ROE) under different financial leverage ratios. Neal's total capital is $14 million, it currently uses only common equity, it has no future plans to use preferred stock in its capital s..
What is current price : Gilmore, Inc., just paid a dividend of $2.40 per share on its stock. The dividends are expected to grow at a constant rate of 6.25 percent per year, indefinitely. Assume investors require a return of 12 percent on this stock. What is the current pric..
What is cost of retained earnings : A firm's stock is selling for $78. The next annual dividend is expected to be $4.00. The growth rate is 7%. The flotation cost is $7. What is the cost of retained earnings?
Financial capital includes all of the except : Financial capital includes all of the following except
Struggling to escape a legacy of oppression : key issues your sections describe Please note you are not writing two separate summaries: you are writing one summary that merges its coverage of the key issues in the two assigned sections.
Determine the specific segment of the market : Determine one (1) internal and one (1) external factor that you discovered during the environmental analysis that could be a barrier to the success of your proposed strategy or strategies. Recommend one (1) solution to each of the barriers in ques..
What will be the economic order quantity : During replenishment of blue diamonds, it is shown that the average demand per period is 4 and the average lead time is 3 per period. What is the standard deviation of demand during replenishment of blue diamond if the standard deviations of deman..

Reviews

Write a Review

 

Financial Management Questions & Answers

  What is company average accounts receivable figure

Two Doors Down, Inc., has weekly credit sales of $40,400, and the average collection period is 25 days. What is the company's average accounts receivable figure?

  Calculate the most recent dividend and dividend yield

Company Z stock currently sells for $40. The required return on the stock is 8%. Company Z maintains a constant 5% growth rate in dividends. Calculate the most recent dividend. What is the dividend yield?

  Make the presidents replacement economically advantageous

In 2006, Violet Rose Computer Corporation purchased a new quality inspection system for $550,000. The estimated salvage value was $50,000 after 10 years. Currently the expected remaining life is 7 years with an AOC of $27,000 per year and an estimate..

  Expected earnings before interest and taxes

Lamey Co. has an unlevered cost of capital of 10.9 percent, a tax rate of 35 percent, and expected earnings before interest and taxes of $21,800. The company has $25,000 in bonds outstanding that sell at par and have a coupon rate of 6 percent. What ..

  Calculate the charge necessary to cover cost

Next year Holyspirit healthcare organization will serve 100 patients in the following manner. Calculate the charge necessary to cover ABC’s cost

  Considering a project with the cash flows

Simplicity Printers is considering a project with the following cash flows: Initial Outlay = $126,000 Cash Flows: Year 1 = $34,000 Year 2 = $69,000 Year 3 = $64,000 If the appropriate discount rate (WACC) is 11.5%, compute the NPV of this project.

  What would be the future value of the annual savings

Karen and Mike currently insure their cars with separate companies, paying $900 and $1,100 a year. If they insured both cars with the same company, they would save 15 percent on the annual premiums. What would be the future value of the annual saving..

  Would it become a discount or premium bond

What is the value of a 10-year, $1,000 par value bond with a 10% coupon paid semi-annually if its required rate of return is 10%? What would its value be if, just after it had been issued, the expected inflation rate rose by 3% causing investors to r..

  Yen exchange rate and pound exchange rate

Suppose the Japanese yen exchange rate is ¥110 = $1, and the British pound exchange rate is £1 = $1.55. What is the cross-rate in terms of yen per pound? Suppose the cross-rate is ¥175 = £1. What is the arbitrage profit per dollar?

  Appropriate value of ford new corporate bond

What would be the appropriate value of Ford's new corporate bond? (Assume that coupons are paid annually by Ford and GM bonds.

  Time for a lump sum to double

If you deposit money today in an account that pays 12% annual interest, how long will it take to double your money? Round your answer to two decimal places.

  Use the formula for the present value of an annuity

Ford’s current incentives include 4.9% financing for 60 months (monthly payments for 5 years) or $1000 cash back for a Mustang. Let’s assume a student wants to buy a Mustang convertible that costs $25,000, and she has no down payment other than the c..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd