Solution-Cost of common equity financing using gordon model

Cost of common equity financing using gordon model

Reference no: EM131419892

Last year the black water inc. paid dividends $3.68. Company's dividends are expected to grow at an annual rate of 5% forever. The company's common stock is currently selling on the market for $84.28. The investments banker will charge flotation costs $2.67 per share. Calculate the cost of common equity financing using Gordon Model.

Round the answer to two decimal places in percentage form.

Reference no: EM131419892

Questions Cloud

Purchased the bond today and held : It has an annual coupon rate of 14.47 percent paid semiannually, and has 5-years remaining until maturity. What would the annual yield to maturity be on the bond if you purchased the bond today and held it until maturity?

What is the spring constant of the spring : A 1200 safe is 1.9 above a heavy duty spring when the rope holding the safe breaks. The safe hits the spring and compresses it 54 cm. What is the spring constant of the spring

What is the current market price of the bonds : The bonds have a 11.17 percent coupon rate and pay interest annually. The current market rate of interest on the fresh water Inc bonds is 8.42 percent. What is the current market price of the bonds?

What sample size will suffice : How many randomly selected employers must we contact in order to create an estimate in which we are 98% confident with a margin of error of 5%?

Cost of common equity financing using gordon model : Company's dividends are expected to grow at an annual rate of 5% forever. The company's common stock is currently selling on the market for $84.28. The investments banker will charge flotation costs $2.67 per share. Calculate the cost of common eq..

Whats the necessary sample size : How many of this younger age group must we survey in order to estimate the proportion of non-grads to within 6% with 90% confidence?

What types of inventory make good collateral : What impact does a compensating balance requirement have on the cost of borrowing from a bank if the firm generally holds little or no checking balances at the bank? What would the impact be if the firm holds large checking balances?

Describe the implementation and evaluation of innovation : Description of the implementation and evaluation of innovation. Evaluation of external technology acquisition and implementation processes. Analysis of the organization's ecosystem in terms of innovation.

Find a confidence interval for the success rate at clinic : Find a 90% confidence interval for the success rate at this clinic.- Interpret your interval in this context.- Explain what 90% confidence means.

User Account

All Pages

Cost of common equity financing using gordon model

Reference no: EM131419892

Reference no: EM131419892

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT