What would be the cost of equity from new common stock

Assignment Help Financial Management

Reference no: EM132005932

1. The following are the cash flows of two projects: Year Project A Project B 0 −$ 290 −$ 290 1 170 190 2 170 190 3 170 190 4 170 If the opportunity cost of capital is 11%, what is the profitability index for each project? (Do not round intermediate calculations. Round your answers to 4 decimal places.)

2. Trahern Baking Co. common stock sells for $32.25 per share. It expects to earn $3.75 per share during the current year, its expected dividend payout ratio is 65%, and its expected constant dividend growth rate is 7.0%. New stock can be sold to the public at the current price, but a flotation cost of 4.5% would be incurred. What would be the cost of equity from new common stock?

Reference no: EM132005932

Questions Cloud

What will the price of the bond be if it is downgraded : What is the price of the bond if Andrew maintains the A rating for the bond issue? What will the price of the bond be if it is downgraded?

What are the internal rates of return on projects : What are the internal rates of return on projects A and B? Calculate the NPV for both projects if the opportunity cost of capital is 16%.

You have earned on your investment in the bond : If you sell the bond now, what internal rate of return will you have earned on your investment in the bond?

What is the net income-what is the roa and roe : If the profit margin is 9 percent, what is the net income? What is the ROA? What is the ROE?

What would be the cost of equity from new common stock : Trahern Baking Co. common stock sells for $32.25 per share. What would be the cost of equity from new common stock?

Make concerted effort to rid himself of debt obligation : The card carries an 18% stated annual interest rate, but compounds monthly. Manny decides to make a concerted effort to rid himself of this debt obligation.

The uncertainty involved in international markets : How would hedging help an international business? What are the uncertainty's involved in international markets?

Valuation analysis-growth analysis-profitability analysis : According to Financial Statements What is Tenet Healthcare's Valuation Analysis, Growth Analysis, Profitability Analysis

The elements of uncertainty in international business : What are the elements of uncertainty in an international business and some ways an organization can protect itself

User Account

All Pages