Reference no: EM132055596
Problem: Cost of Common Equity
The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 6% per year. Callahan's common stock currently sells for $28.50 per share; its last dividend was $1.50; and it will pay a $1.59 dividend at the end of the current year.
Using the DCF approach, what is its cost of common equity? Round your answer to two decimal places. Do not round your intermediate calculations. %
If the firm's beta is 1.90, the risk-free rate is 8%, and the average return on the market is 12%, what will be the firm's cost of common equity using the CAPM approach? Round your answer to two decimal places. %
If the firm's bonds earn a return of 8%, based on the bond-yield-plus-risk-premium approach, what will be rs? Use the midpoint of the risk premium range discussed in Section 10-5 in your calculations. Round your answer to two decimal places. %
If you have equal confidence in the inputs used for the three approaches, what is your estimate of Callahan's cost of common equity? Round your answer to two decimal places. Do not round your intermediate calculations. %
|
What percentage of company capital structure consist of debt
: Hook Industries' capital structure consists solely of debt and common equity. It can issue debt at rd = 9%, and its common stock currently pays a $4.00.
|
|
Surrounding microbes in environment
: Why do some microbes specialize to use a different food source than the surrounding microbes in their environment?
|
|
Make a prediction about growth
: Make a prediction about growth on the 1%, 3%, and 10% salt plates: which will grow on more of these plates, Bacillus cereus
|
|
What important things do they reveal about american sport
: Prepare an essay of 750-1000 words about these guides, targeted at museum-goers, to be published in the souvenir program accompanying the exhibition.
|
|
Define what will be the firm cost of common equity
: If the firm's beta is 1.90, the risk-free rate is 8%, and the average return on the market is 12%, what will be the firm's cost of common equity.
|
|
Is rna synthetase and rna replicase the same thing
: Is RNA synthetase and rna replicase the same thing? (during replication of rna plus strand virus)
|
|
How did the slave codes regulate free blacks
: How did the slave codes make slavery a permanent condition? How did race play a role in enslaving Africans in colonial America?
|
|
Designed by engineering team at golem security
: A new product is being designed by an engineering team at Golem Security. How much is the target cost per unit?
|
|
Chance favors only the prepared mind
: Louis Pasteur once stated that "chance favors only the prepared mind." What did he mean by that? What discovery, clearly illustrates Pasteur's statement?
|