Analog Electronic Corporation has an ROE = 9% and plowback ratio of 2/3. This year's earnings were $3 per share. The annual dividend was just paid. The equity cost of capital is 12%. Compute in the following order and enter your answers in the next five questions. [Be accurate. 2/3 is not 0.66] Growth is: g Next dividend is D₁ = The stock price is: Po = The current Po/Eo ratio is The PVGO is Po - E₁ / TE = ....... ...... ******

Analog Electronic Corporation has an ROE = 9% and plowback ratio of 2/3. This year's earnings were $3 per share. The annual dividend was just paid. The equity cost of capital is 12%. Compute in the following order and enter your answers in the next five questions. [Be accurate. 2/3 is not 0.66] Growth is: g Next dividend is D₁ = The stock price is: Po = The current Po/Eo ratio is The PVGO is Po - E₁ / TE = ....... ...... ******

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The Evanec Company's next expected dividend, D1, is $2.69; its growth rate is 7%; and its common stock now sells for $35.00. New stock (external equity) can be sold to net $31.50 per share. What is Evanec's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places. rs = % What is Evanec's percentage flotation cost, F? Round your answer to two decimal places. F = % What is Evanec's cost of new common stock, re? Do not round intermediate calculations. Round your answer to two decimal places. re = %
HighGrowth Company has a stock price of $21. The firm will pay a dividend next year of $1.01, and its dividend is expected to grow at a rate of 3.6% per year thereafter. What is your estimate of HighGrowth's cost of equity capital? The required return (cost of capital) of levered equity is %. (Round to one decimal place.)
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