Glenna Gayle common stock sells for $55, and dividends paid last year were $1.35. Flotation costs on issuing stock will be $4.40. The dividends are predicted to have a 10% growth rate. What is the cost of internal equity for Glenna Gayle?
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Glenna Gayle common stock sells for $55, and dividends paid last year were $1.35. Flotation costs on issuing stock will be $4.40. The dividends are predicted to have a 10% growth rate. What is the
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- A firm's current stock price is $42. You expect the firm to pay $1.25 worth of dividends next year and for dividend payments to continue growing at 3.25% a year forever. Earnings growth is exected to be 4% per year and the firm currently borrows at 6.5%. Find the firm's cost of equity? Then, create a data table to show the cost of equity changes as the growth rate in dividends increases.Slow 'n Steady, Inc., has a stock price of $28, will pay a dividend next year of $3.10, and has expected dividend growth of 1.7% per year. What is your estimate of Slow 'n Steady's cost of equity capital? The required return (cost of capital) of levered equity is __ % ? (Round to one decimal place.)Bob's Rawhide Company has a dividend payout ratio of 45%. Next year it will earn $0.75 per share and have a return on equity of 12%. The shareholders' required return is 8%. Calculate the company's growth rate of EPS. Using the earnings model, what is the value of the stock? Construct a data table that shows how the growth rate and value of the stock will change if the ROE ranges between 10% and 20%, in 1% increments. Now, using that data, create a scatter chart to show the relationship between the value of the stock and the ROE. Is the relationship linear? At what point does the model break down? Using the constant-growth model, what is the value of the stock?
- Last year Artworks, Inc. paid a dividend of $1.75. You anticipate that the company’s growth rate is 6 percent and have a required rate of return of 9 percent for this type of equity investment. What is the maximum price you would be willing to pay for the stock? Could you answer in an equation form so i can see where the numbers are supposed to be plugged inA stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $59. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $44. What are the dividend yield and percentage capital gain in this case?The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 4% per year. Callahan's common stock currently sells for $28.00 per share; its last dividend was $2.00; and it will pay a $2.08 dividend at the end of the current year. a. Using the DCF approach, what is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. % b. If the firm's beta is 2.0, the risk-free rate is 6%, and the average return on the market is 13%, what will be the firm's cost of common equity using the CAPM approach? Round your answer to two decimal places. % c. 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. % d. If you have equal confidence in the inputs used for the three approaches, what is your estimate of Callahan's cost of common equity? Do not round…