Determination of growth rate

Reference no: EM1360387

Grateway Inc. has a weighted average cost of capital of 11.5 percent. Its target capital structure is 55 percent equity and 45 percent debt. The company has sufficient retained earnings to fund the equity portion of its capital budget. The before-tax cost of debt is 9 percent, and the company's tax rate is 30 percent. If the expected dividend next period (D1) and current stock price are $5 and $45, respectively, what is the company's growth rate?

Reference no: EM1360387

Questions Cloud

Explain the incoterm fob new york can be used : Explain The INCOTERM FOB New York can be used for what mode of transportation and Which of the following dimensions does NOT accurately describe the majority firms in the United States?

At what angle should the highway engineer bank : At what angle should the highway engineer bank. What is the magnitude of the acceleration.

Illustrate what level of output and price long run : Illustrate what will the level of output and price in the long run if this industry were perfectly competitive.

Social responsible risk management : What is the definition of socially responsible risk management and How would you go about enacting a more socially responsible risk management strategy in your current workplace? Brief explanation.

Determination of growth rate : Grateway Corporation has a weighted average cost of capital of 11.5%. Its target capital structure is 55 percent equity and 45% debt. The company has sufficient retained earnings to fund the equity portion of its capital budget.

Training a new employee : shows a general overview of G&A that includes the different departments and a brief description of each department and then go through our excel forecast files.

Which statements is correct regarding the sale of the house : He sold the house in 2006 for $225,0000. Which statements is correct regarding the sale of the house.

The company retirement plan : Show the savings involved in a company retirement plan as well as typical monetary benefits that employees should focus on when considering a new job.

Calculation of expected return : XYZ Corporation stock has a 50% chance of producing a 30% return, a 25 percent chance of producing a 9% return, and a 25% chance of producing a -25 percent return.

User Account

All Pages