1)
A firm can issue perpetual preferred stock for $44.10 that wouldpay a constant annual dividend of $4.60. What is the firm'scost of preferred stock?
Answer in percentage without the symbol
Question 2 (1 point)
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A firm is expected to pay a $2.05 dividend. The stock iscurrently selling for 43.50 and is expected to grow at a rate of5%. What is the cost of retained earnings for this firm?
Answer in percentage without the symbol
Question 3 (1 point)
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A firm has a beta of 1.0. The market is expected to yield7.9% and the risk free rate is 2%. What is the cost ofretained earnings for this firm?
Answer in percentage without the symbol
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Question 4 (1 point)
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A stock that just paid a $2.30 dividend. Dividends havebeen growing at a 4% rate and the stock is currently selling for$45.00. What is the cost of retained earnings of thisfirm?
answer in percent without symbol.
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Question 5 (1 point)
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A firm has a target capital structure that consists of 60% ofretained earnings and the rest in debt. The firm's cost ofretained earnings is8.3%. The firm's cost of new debt issimilar to the yield to maturity of its existing bonds, which is6.1%. The firm's tax rate is 25%. Given thisinformation, and given that the firm has no preferred stock, whatis the WACC?
Answer in percentage without the symbol.
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Question 6 (1 point)
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A firm is expected to pay a $2.15 dividend. The stock iscurrently selling for 65.85 and is expected to grow at a rate of5%. What is the cost of new equity if floatation costs are10%?
Answer in percentage without the symbol
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1) A firm can issue perpetual preferred stock for $44.10 that would pay a constant annual dividend of $4.60. What is th
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