Harborline Solutions is a no-growth firm with 1.8 million shares outstanding. It expects to earn a constant $14.2 million per year on its assets. The firm has no debt, and all earnings are paid out as dividends. The firm's cost of capital is 11.8%. Calculate the current price per share of Harborline Solutions' stock.
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- NoGrowth Corporation currently pays a dividend of $0.54 per quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the firm's equity cost of capital is 12.9% (effective annual rate)? The stock price is $ (Round to the nearest cent.)Financial AccountingEakins Inc.’s common stock currently sells for $22.50 per share, the company expects to earn $2.75 per share during the current year, its expected payout ratio is 70%, and its expected constant growth rate is 6.00%. New stock can be sold to the public at the current price, but a flotation cost of 8% would be incurred. By how much would the cost of new stock exceed the cost of retained earnings? Do not round your intermediate calculations.
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