Find what is f cost of ordinary shares

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Question 1: You expect ABC shares to pay a $7.50 dividend at the end of the year. The share price is expected to be $150 at that time. If you require a 10% rate of return, what would you pay for the share now?

Question 2: F Corporation is issuing new ordinary shares at a market price of $28. Dividends last year were $1.30 and are expected to grow at an annual rate of 7%, forever. What is F's cost of ordinary shares?

Question 3: Your firm is planning to issue preference shares. The shares are expected to sell for $98 each and will have a $100 face value on which the firm will pay a 14% dividend. What is the cost of capital to the firm for the preference shares?

Reference no: EM132564331

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