Calculating cost of equity

Assignment Help Financial Management

Reference no: EM131057684

Calculating cost of equity. The lo tech Co. Just issued a dividend of $1.80 per share on its common stock. The company is expected to maintain a constant 6 percent growth rate in its dividends indefinitely. If the stock sells for $41 a share, what is the company's cost of equity?

Reference no: EM131057684

Questions Cloud

Equation bond price-coupon payment : A bond was issued five years ago with 20 years to maturity carrying 8 percent coupon rate and it was issued at par. The issuer’s financial performance has deteriorated significantly and the premium for the possibility of bankruptcy has changed from 3..

What is the current price of the common stock : Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 40% for the next 4 years, after which competition will probably reduce the g..

Company accepts projects with payback periods : Project H requires an initial investment of $100.,000 and produces annual cash flows of $50,000, $40,000, and $30,000. The projects are mutually exclusive. The company accepts projects with payback periods of 3 years or less.

What is the bank cost of preferred stock : Calculating Cost of Preferred Stock. Sixth fourth bank has an issue of preferred stock with a $6.25 stated dividend that just sold for $108 per share. What is the bank's cost of preferred stock?

Calculating cost of equity : Calculating cost of equity. The lo tech Co. Just issued a dividend of $1.80 per share on its common stock. The company is expected to maintain a constant 6 percent growth rate in its dividends indefinitely. If the stock sells for $41 a share, what is..

What should be duration in order for loan to be approved : A bank is planning to make a loan of $5,000,000 to a firm in the steel industry. It expects to charge a servicing fee of 50 basis points. The loan has a maturity of 8 years with a duration of 7.5 years. The cost of funds (the RAROC benchmark) for the..

Shares of common stock outstanding-dividend payout ratio : Prince Systems(PS) has 500,000 shares of common stock outstanding and its EPS is $7. The firm has a dividend payout ratio of 35% and the current market price of its stock is $75.

What do rights and duty ethics : What does utilitarianism tell us about this case? What do rights and duty ethics tell us? Consider these questions from the point of view of a design engineer who must work on a product that might emit hazardous radiation. Which ethical theory applie..

What should be current stock price : Ranyard's beta is 1.13, and the last dividend per share paid was $4.21. The market risk premium is estimated to be 7.56%, and the real rate of interest is 2.04%. The liquidity risk premium is 0.7%. Analysts expect the company to grow at a rate of 3.5..

User Account

All Pages