Patah Hati Berhad's common stock is selling for RM22.00 per share. The last dividend was RM1.20, and dividends are expected to grow at a 6% annual rate. Flotation costs on new stock sales are 5% of the selling price. Compute the cost of Patah Hati Berhad's new

Patah Hati Berhad's common stock is selling for RM22.00 per share. The last dividend was RM1.20, and dividends are expected to grow at a 6% annual rate. Flotation costs on new stock sales are 5% of the selling price. Compute the cost of Patah Hati Berhad's new

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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Barton Industries expects next year's annual dividend, D1, to be $2.30 and it expects dividends to grow at a constant rate g = 4.9%. The firm's current common stock price, P0, is $25.00. If it needs to issue new common stock, the firm will encounter a 4.5% flotation cost, F. What is the flotation cost adjustment that must be added to its cost of retained earnings? Do not round intermediate calculations. Round your answer to two decimal places. _____% What is the cost of new common equity considering the estimate made from the three estimation methodologies? Do not round intermediate calculations. Round your answer to two decimal places. _____%
JP Morgan Corporation's stock currently trades at $100 per share, the stock expects to pay an $8 dividend this year and the stock has a perpetual growth rate of 5%. What is the cost of new common equity if JP Morgan pays 6% in flotation costs?
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Banyan Co.’s common stock currently sells for $52.00 per share. The growth rate is a constant 5%, and the company has an expected dividend yield of 5%. The expected long-run dividend payout ratio is 25%, and the expected return on equity (ROE) is 7%. New stock can be sold to the public at the current price, but a flotation cost of 15% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your answer to two decimal places.
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Banyan Co.’s common stock currently sells for $57.25 per share. The growth rate is a constant 6%, and the company has an expected dividend yield of 4%. The expected long-run dividend payout ratio is 40%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your answer to two decimal places.
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?
Southern Power just paid an annual dividend of $7.1 per share. Because of increasing competition from home solar installations, the dividend is expected to shrink by 3% per year. The required rate of return is 8%. What is the value of the stock?

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