Face value of equity shares of a company is ? 10, while current market price is7 200 per share. Company is going to start a new project, and is planning tofinance it partially by new issue and partially by retained earnings. You arerequired to CALCULATE cost of equity shares as well as cost of retained earnings ifissue price will be 7 190 per share and floatation cost will be 5 per share.Dividend at the end of first year is expected to be ? 10 and growth rate will be 5%.

We are given that, Face value of equity share = ₹ 10 Current market price = ₹ 200 Issue price per…

Answered: Face value of equity shares of a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Weston Corporation just paid a dividend of $2.75 a share (i.e., D0 = $2.75). The dividend is expected to grow 9% a year for the next 3 years and then at 5% a year thereafter. What is the expected dividend per share for each of the next 5 years? Do not round intermediate calculations. Round your answers to the nearest cent. D1 = $ D2 = $ D3 = $ D4 = $ D5 = $
Weston Corporation just paid a dividend of $3.5 a share (l.e., Do = $3.5). The dividend is expected to grow 12% a year for the next 3 years and then at 3% a year thereafter. What is the expected dividend per share for each of the next 5 years? Do not round Intermediate calculations. Round your answers to the nearest cent. D1 $ D₂ = $ D3=$ D4=$ Ds = $
Weston Corporation just paid a dividend of $2.5 a share (i.e., Do = $2.5). The dividend is expected to grow 12% a year for the next 3 years and then at 4% a year thereafter. What is the expected dividend per share for each of the next 5 years? Do not round intermediate calculations. Round your answers to the nearest cent. D₁ = $ D₂ = $ D3 = $ D4 = $ D5 = $
BB8 Mining has a payout ratio of 30% and is due to pay a dividend of $2.30 next year. The stock is currently trading at $45 and the return on equity (ROE) is 15%. Using the dividend discount model, what is the cost of equity capital for BB8?
company presently pays no dividend. You anticipate company will pay an annual dividend of $1.00 per share two years from today and you expect dividends to grow by 3% per year thereafter. If company’s equity cost of capital is 14%, then what is a fair value for a share of company today? Enter answer rounded to the nearest cent.
Using the data from question 2, please answer question 3.
Growth Company's current share price is $20.10 and it is expected to pay a $0.95 dividend per share next year. After that, the firm's dividends are expected to grow at a rate of 4.5% per year. a. What is an estimate of Growth Company's cost of equity? b. Growth Company also has preferred stock outstanding that pays a $2.00 per share fixed dividend. If this stock is currently priced at $28.15, what is Growth Company's cost of preferred stock? c. Growth Company has existing debt issued three years ago with a coupon rate of 6.2%. The firm just issued new debt at par with a coupon rate of 6.3%. What is Growth Company's pretax cost of debt? d. Growth Company has 4.9 million common shares outstanding and 1.2 million preferred shares outstanding, and its equity has a total book value of $50.1 million. Its liabilities have a market value of $20.2 million. If Growth Company's common and preferred shares are priced as in parts (a) and (b), what is the market value of Growth Company's assets? e.…
Company Z-prime's earnings and dividends per share are expected to grow by 4% a year. Its growth will stop after year 4. In year 5 and afterward, it will pay out all earnings as dividends. Assume next year's dividend is $9, the cost of equity is 9%, and next year's EPS is $14. What is Z-prime's stock price? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Stock price
Please answer questions 3/4 PLEASE ! The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 5% per year. Callahan's common stock currently sells for $24.00 per share; its last dividend was $1.80; and it will pay a $1.89 dividend at the end of the current year. Using the DCF approach, what is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. 12.88 % If the firm's beta is 1.8, the risk-free rate is 4%, and the average return on the market is 14%, what will be the firm's cost of common equity using the CAPM approach? Round your answer to two decimal places. 22 % If the firm's bonds earn a return of 12%, based on the bond-yield-plus-risk-premium approach, what will be rs? Use the judgmental risk premium of 4% in your calculations. Round your answer to two decimal places. % 16.96? If you have equal confidence in the inputs used for the three approaches, what is your…
BBB plc plans to pay a dividend next year of 41.2p per share and has a cost of equity of 9% per year. BBB plc has a dividend payout ratio of 50% and its EPS (earnings per share) is 80p. What is the ex-div share price of the company?
Assume the stock for Mo - Money Inc. is expected to pay a $10 dividend for each of the next 3 years while this company develops new products, Starting 4 years from today, the dividend is expected increase by 4% and grow at that yearly rate thereafter. If the annual equity opportunity cost of capital for Mo - Money is 14%, what should the current price of one share of this stock be? Enter your estimate as a positive number stated to the nearest penny li.e., round to two decimal places). Do not enter any commas.

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