User Account

All Pages

How much new equity capital will the company need to raise

Assignment Help Accounting Basics
Reference no: EM132578781

Consolidated Pasta is currently expected to pay annual dividends of $10 a share in perpetuity on the 1.4 million shares that are outstanding. Shareholders require a 8% rate of return from Consolidated stock.

Question a. What is the price of Consolidated stock? (Do not round intermediate calculations.)

Question b. What is the total market value of its equity? (Enter your answer in millions.)

Consolidated now decides to increase next year's dividend to $20 a share, without changing its investment or borrowing plans. Thereafter the company will revert to its policy of distributing $10 million a year.

Question c. How much new equity capital will the company need to raise to finance the extra dividend payment? (Enter your answer in millions.)

Reference no: EM132578781

Questions Cloud

Present critique or questions toward the issues in film : Present your critique and/or questions toward the issues addressed in the film (or the articles). Alternatively, you could discuss the arguments introduced
Explain what happens in nervous : Explain what happens in your nervous, muscular and skeletal system from the moment the insects lands to the moment it is removed.
What is in-the-money call option : What is an in-the-money call option? What is an out-of-money put option?
List three specific rewards : List three specific rewards which a flower could provide its pollinator?
How much new equity capital will the company need to raise : How much new equity capital will the company need to raise to finance the extra dividend payment? (Enter your answer in millions.)
Moment the insects lands to the moment it is removed : Explain what happens in your nervous, muscular and skeletal system from the moment the insects lands to the moment it is removed?
Analyze challenges of using cognitive behavioral therapy : Analyze challenges of using cognitive behavioral therapy for groups. Recommend effective strategies in cognitive behavioral therapy for groups.
What will be the number of shares that hold after the stock : What will be the number of shares that you hold if the firm splits five-for-four instead of paying the stock dividend? (Do not round intermediate calculations.)
How do national expenditures affect an organization : What is cost containment and how has it affected health care? How do national expenditures affect an organization?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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