CFIN -STUDENT EDITION-ACCESS >CUSTOM<
CFIN -STUDENT EDITION-ACCESS >CUSTOM<
6th Edition
ISBN: 9780357752951
Author: BESLEY
Publisher: CENGAGE C
bartleby

Videos

Question
Book Icon
Chapter 11, Problem 8PROB
Summary Introduction

Cost of retained earnings:

Cost incurred by the company by using retained earnings, instead of declaring dividend to common stock holders.

Calculate the cost of retained earnings as follows:

Cost retained earnings=Expected dividendCurrent price+Growth rate

Cost of new common stock is the cost incurred by the company for issue new common stock.

Calculate the cost new common stock as follows:

Cost retained earnings=Expected dividendCurrent price×(1Flotation cost)+Growth rate

TTH has growth rate of 4% and current price is $34 and paid a recent dividend of 4.25. Flotation cost for issuing the new common stock is 8.5%.

Blurred answer
Students have asked these similar questions
An S corporation earns 59.10 per share before taxes. The corporate tax rate is 39%, the personal tax rate on dividends is 15%, and the personal tax rate on non-dividend income is 36%. What is the total amount of earnings after - taxes? a. $3.28 b. $3.93 c. $2.62 d. $4.59
You want to buy a new sports car from Muscle Motors for $36,000. The contract is in the form of an annuity due for 60 months at an APR of 8.00 percent.      What will your monthly payment be?
Use the following information to answer this question: Net sales Windswept, Incorporated 2024 Income Statement Cost of goods sold Depreciation ($ in millions) Earnings before interest and taxes Interest paid Taxable income Taxes Net income $ 14,150 8,150 515 $ 5,485 108 $ 5,377 1,129 $ 4,248 Windswept, Incorporated 2023 and 2024 Balance Sheets ($ in millions) 2023 2024 2023 2024 Cash Accounts received $ 300 $ 330 Accounts payable $ 1,980 $1,955 1,190 1,090 Long-term debt 1,110 1,430 Inventory 2,120 1,795 Common stock 3,440 3,080 Total $ 3,610 $ 3,215 Retained earnings 690 940 Net fixed assets 3,610 Total assets $ 7,220 4,190 $ 7,405 Total liabilities & equity $ 7,220 $ 7,405 What is the fixed asset turnover for 2024?
Knowledge Booster
Background pattern image
Finance
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Text book image
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License