Sentry Manufacturing paid a dividend yesterday of $5 per share (D0 = $5). The dividend is expected to grow at a constant rate of 0.076 per year. The price of Sentry Manufacturing's stock today is $34 per share. If Sentry Manufacturing decides to issue new common stock, flotation costs will equal $0.74 per share. Sentry Manufacturing's marginal tax rate is 0.31. Based on the above information, the cost of retained earnings is Instruction: Type your answer as a decimal, and round to three decimal places
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Sentry Manufacturing paid a dividend yesterday of $5 per share (D0 = $5). The dividend is expected to grow at a constant rate of 0.076 per year. The price of Sentry Manufacturing's stock today is $34 per share. If Sentry Manufacturing decides to issue new common stock, flotation costs will equal $0.74 per share. Sentry Manufacturing's marginal tax rate is 0.31. Based on the above information, the cost of
Instruction: Type your answer as a decimal, and round to three decimal places
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