Estimate made from three estimation methodologies

Assignment Help Risk Management

Reference no: EM131538329

Barton Industries expects next year's annual dividend, D1, to be $1.60 and it expects dividends to grow at a constant rate g = 4%. The firm's current common stock price, P0, is $20.50. If it needs to issue new common stock, the firm will encounter a 4% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. What is the flotation cost adjustment that must be added to its cost of retained earnings? Round your answer to 2 decimal places. Do not round intermediate calculations. % What is the cost of new common equity considering the estimate made from the three estimation methodologies? Round your answer to 2 decimal places. Do not round intermediate calculations.

What is the cost of new common equity considering the estimate made from the three estimation methodologies? Round your answer to 2 decimal places. Do not round intermediate calculations.?

Reference no: EM131538329

Questions Cloud

What is the impact on the firm ordering policy : what is the impact on the firm's ordering policy?

Put option on the stock-what is your total profit : You buy one put option on the stock and pay $3 for it. One year later, the price is $75. What is your total profit?

How many contracts are needed to be held in the hedge : Approximately how many contracts are needed to be held in the hedge?

Create range of potential payoffs : Create a range of potential payoffs in 6 months for this position assuming stock prices of $40, $45, $50, $55 and $60.

Estimate made from three estimation methodologies : What is the cost of new common equity considering the estimate made from the three estimation methodologies?

What is the place of the individual in a democracy : What is place of the individual in a Democracy? How can initial consideration about setting up a democracy help to reslove foundamental problems of democracy?

Neglected in controlling energy balance : Researchers say that one component has been largely neglected in controlling energy balance. What is that?

Why so many organizations fall into the doom loop : What does your contrast teach about why so many organizations fall into the Doom Loop rather than build momentum over the long term in the Flywheel?

Greatest challenges of being a public health care worker : What do you believe are the three greatest challenges of being a public health care worker? Why?

User Account

All Pages