Calculate the cost of internal equity for alpha tool

Assignment Help Finance Basics
Reference no: EM13300217

The stock of Alpha Tool sells for $10.25 per share. Its current dividend rate, D0, is $1 per share. Analysts and investors expect Alpha to increase its dividends at a 10 percent rate for each of the next two years. This annual dividend growth rate is expected to decline to 8 percent for years 3 and 4 and then to settle down to 4 percent per year forever. Calculate the cost of internal equity for Alpha Tool.

Reference no: EM13300217

Questions Cloud

What is the change in the kinetic energy of this object : An object of mass 10 kg is initially at rest. What is the change in the kinetic energy of this object
Find the work done by the normal force on the object : Jamie pulls a box of 1.0 kg mass up an inclined plane by a constant force of 10 N that causes a displacement of 0.50 m. find the work done by the normal force on the object
Determine the maximum normal strain developed in the board : The man has a mass of 65kg and stands motionless at the end of the diving board. If the board has the cross section, determine the maximum normal strain developed in the board. The modulus of elasticity for the material is E = 117GPa
What is the work done by dan : Dan lifts a mass of 10 kg vertically upward at a constant speed of 0.2 m/s through a distance of 1 m. What is the work done by Dan
Calculate the cost of internal equity for alpha tool : This annual dividend growth rate is expected to decline to 8 percent for years 3 and 4 and then to settle down to 4 percent per year forever. Calculate the cost of internal equity for Alpha Tool.
When the car is at the top of the bump : A car moving at 10.0 m/s encounters a bump that has a circular cross-section with a radius of 30.0 m. when the car is at the top of the bump
Determine the landing speed of the airplane if it travels : A 32000 lb airplane lands on an aircraft carrier and is caught by an arresting cable. The cable is inextensible and is paid out at A and B from mechanisms located below deck and consisting of pistons moving in long oil-filled cylinders.
Calculate the incremental net operating income : Prepare a contribution format income statement - Calculate the incremental net operating income
How much would it cost him to buy the annuity today : Your father is about to retire, and he wants to buy an annuity that will provide him with $91,000 of income a year for 25 years, with the first payment coming immediately.

Reviews

Write a Review

Finance Basics Questions & Answers

  What was the original u.s. dollar value of the zim dollar

On August 1, 2006, Zambabwe changed the value of the Zim dollar from Z$101/U.S.$ to Z$250/U.S.$

  What would be the interest portion of the payment scheduled

A mortgage loan in the amount of $100,000 is made at 12% interest for 20 years. Payments are to be monthly in each part of this problem.

  Calculate the debt to equity ratio

Corporation A is equity financed with 10000 shares of equity outstanding selling for $100 a share. It is restructuring. Low debt plan is to issue debt of $200,000 with proceeds to buy the stock.

  What is the investors second year tax obligation

The investor's income tax bracket is 30%. The long-term capital gains tax rate is 15 percent. What is the investor's second year's tax obligation?

  Compute the net present value of the two projects

Project A could be modified. By spending $25,000 more initially, the net annual cash flows could be increased by $10,000 per year. Would this change Leung'sdecision?

  Calculating contribution per hour

Joe runs a little parts shop. His hourly labor price to customers is $40 every hour and his hourly material value works out to about 25 percent of the hourly labor price.

  Computation of present value of a liability

Computation of present value of a liability and Miner Industries develops an open pit uranium mine

  What is the amount of the annual net income for the firm

The company adheres to a 60% dividend payout ratio and has a P/E ratio of 19. There are 21,000 shares of stock outstanding. What is the amount of the annual net income for the firm?

  What is the current value of the property

A rental property is providing 13% rate of return. Next year's rent is expected to be $1.0 million and is expected to grow at 3% per year forever. What is the current value of the property? a. 7.7 million b 10 million c. 33.3 million d. none of th..

  What is the bank cost of preferred stock

Sixth Fourth Bank has an issue of preferred stock with a $7.10 stated dividend that just sold for $76 per share.

  What is the u.s. dollar-canadian dollar exchange rate

Six-month U.S. securities have an annualized return of 6.5% and a periodic return of 3.25%. If interest rate parity holds, what is the U.S. dollar-Canadian dollar exchange rate in the 180-day forward market?

  Create a statement of cash flows

Bando Corporation has a $300,000 balance in Accounts Receivable and a $4,000 debit balance in Allowance for Doubtful Accounts. Credit sales for the period totaled $1,800,000.

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