Calculate the cost of the companys retained earnings

Assignment Help Financial Accounting

Reference no: EM13825892

The corporate treasurer of Rollinsford Company expects the company to grow at 3% in the future, and debt securities at 4% interest (tax rate = 35%) to be a cheaper option to finance the growth. The current market price per share of its common stock is $39, and the expected dividend in one year is $1.50 per share. Calculate the cost of the company's retained earnings and check if the treasurer's assumption is correct.

I have to be able to show this in Excel.

Reference no: EM13825892

Questions Cloud

Company vision and values statement : The problem relates to Business Management and it discuss about the business communication and the effectiveness of various forms of business communication which include company memo, one section of a company report, an email, a public blog or oth..

Taxable bond yield-investor be indifferent between the bonds : Assume taxable bond yields 8.25 percent and a comparable municipal bond yields 6.85 percent. At what tax rate would an investor be indifferent between the bonds?

What is the expected value for the best decision : For the payoff table below, the decision maker will use P(s1) = .15, P(s2) = .5, and P(s3) = .35. What is the expected value for the best decision

Harvard case study ford motor company value enhancement plan : Case Study: Ford Motor Company's Value Enhancement Plan (A), Harvard Business School, 9-201-079.

Calculate the cost of the companys retained earnings : The corporate treasurer of Rollinsford Company expects the company to grow at 3% in the future, and debt securities at 4% interest (tax rate = 35%) to be a cheaper option to finance the growth. The current market price per share of its common stock i..

A report on patient assessment on 5 dimensions of health : Write a report on patient assessment on 5 dimensions of health

What will the percentage change in the price of this bond : A 15-year, 4 percent coupon bond with a face value of $1,000 pays interest semiannually. Assume the bond currently sells at par. What will the percentage change in the price of this bond be if market rates increase by 10 percent?

What is the yield to maturity-bonds issued : The bonds issued by North & South bear a coupon rate of 7.5 percent, payable semiannually. The bonds mature in 6.5 years, sell at par, and have a $1,000 face value. What is the yield to maturity?

Performance evaluation system in force : You have recently been appointed as the senior management accountant in a large listed company, Apple plc. Apple plc produces a wide variety of differently products (candy bars, chews and other sweets) in batches using various combinations of high..

User Account

All Pages