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COST OF COMMON EQUITY WITH FLOTATION Banyan Co.'s common stock currently sells for $37.00 per share. The growth rate is a constant 9.8%, and the company has an expected dividend yield of 4%. The expected long-run dividend payout ratio is 30%, and the expected return on equity (ROE) is 14%. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. what would be the cost of new equity? Round your answer to two decimal places. Do not round your intermediate calculations.
Jennifer Electrical is evaluating whether a lockbox it is currently using is worth keeping. Management estimates that the lockbox reduces the mail float by 2.4 days and the processing by half a day. The bank charges $0.34 per processed check. Assume ..
What are some of the features that could be included with a bond prospectus that may have an impact on the yield of a new bond issue?
You’ve worked out a line of credit arrangement that allows you to borrow up to $60 million at any time.
Compute the percentage total return, capital gains yield, and dividend yield.
You need cash now for an unexpected expense, so you want to sell your bond. If the market rate today is 3%, how much can you get for your bond?
What amount of rent expense should be reported in the December 31, 2017 Income Statement of XYZ
Change in Cost of Capital. Assume that Naperville Co. will use equity to finance a project in Switzerland, while Lombard Co. will rely on a dollar-denominated loan to finance a project in Switzerland, and Addison Co. will rely on a Swiss franc-denomi..
What are the various methods for evaluating possible capital projects, in terms of their possible benefits to the firm? Describe the benefits and/or shortcomings of each. What is the NPV profile and what are its uses?
You have been hired to value a new 10-year callable, convertible bond. The bond has a 5,6 per cent coupon rate, payable annually. The bond is callable at 1100 dollars but based on prior experience it will not be called unless the conversion value is ..
A pension plan is obligated to make disbursements of $2.0 million, $3.0 million, and $2.0 million at the end of each of the next three years, respectively. Find the duration of the plan's obligations if the interest rate is 11% annually.
McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $840 per set and have a variable cost of $440 per set.
A grocery store estimates that customers arrive at the rate of 15 per hour. The cashier can serve customers at a rate 20 per hour. Calculate the average amount of time customer waits in a line (in minutes)
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