Expected long-run dividend payout ratio

Assignment Help Finance Basics
Reference no: EM133072444

Banyan Co.'s common stock currently sells for $34.75 per share. The growth rate is a constant 6%, and the company has an expected dividend yield of 3%. The expected long-run dividend payout ratio is 20%, and the expected return on equity (ROE) is 7.5%. New stock can be sold to the public at the current price, but a flotation cost of 10% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your answer to two decimal places.

Reference no: EM133072444

Questions Cloud

Calculate the npv of the this loan financing : ABC borrows $11,352 at a subsidized rate of 2.9% to invest in a project. The project lasts for 13 years and ABC repays the loan at the end of the project.
Define the public health problem : Explain the public health problem your program will address using factual information. Define the public health problem.
Correlation between the returns : Assume that there are only two portfolios in the world: portfolio A and portfolio B. The expected return of each portfolio is 10% and 20% and the standard devia
How many workers should Ms Smith hire : She estimates that additional workers would generate the following total output where each unit of output is $10, How many workers should Ms Smith hire
Expected long-run dividend payout ratio : Banyan Co.'s common stock currently sells for $34.75 per share. The growth rate is a constant 6%, and the company has an expected dividend yield of 3%.
Calculate the past growth rate in earnings : The Bouchard Company's EPS was $6.10 in 2021, up from $3.95 in 2016. The company pays out 60% of its earnings as dividends, and its common stock sells for $39.0
Partial melting-geological processes that lead to melting : Explain partial melting and the geological processes that lead to melting. Describe, in general terms, the range of chemical compositions of magmas.
Calculate the npv of the loan financing : ABC borrows $11,632 at a subsidized rate of 2.7% to invest in a project. The project lasts for 11 years and ABC repays the loan at the end of the project.
Calculate the total annual inventory cost : In addition, the relevant carrying cost is $2.50 a copy per year. Calculate the total annual inventory cost

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the formula for computing the payout ratio would

what is the formula for computing the payout ratio? would you expect this ratio to be high or low for a growth

  Confidence interval for the population mean

Suppose the standard deviation of tax paid in this city is $914. The 95% confidence interval for the population mean (rounded to two decimal place) is:

  European call option on a non-dividend-paying stock

Consider a six-month European call option on a non-dividend-paying stock. The stock price is $30, the strike price is $29

  Futures prices among currencies today

According to www.cmegroup.com does it appear that futures prices among currencies today (6/3/2016) (for the closest settlement date) are changing in the same direction? Explain.

  Month living expenses covered ratio

Use a "made-up" example of a typical household's monthly income statement and balance sheet. And provide a personal balance sheet as of the start of the semeste

  Calculate a modified irr for project

a. How many IRRs does this project have? b. Calculate a modified IRR for this project assuming a discount and compounding rate of 9.8%. c. Using the MIRR and a cost of capital of 9.8 %9.8%,would you take the project?

  Discuss the potential impact of decentralized finance

Discuss the potential impact of Decentralized Finance (DeFi) applications on commercial banks. Relate your answer to the reason why banks exist.

  What interest rate compounded annually

What interest rate, compounded annually, does this represent?

  Plot the recipients money income-leisure tradeoff

show her equilibrium allocation of time between work and leisure per day. Show that it is possible to have more than one most-preferred outcome.

  Ordinary annuity and the price

County Ranch Insurance Company wants to offer a guaranteed annuity in units of $500, payable at the end of each year for 25 years.

  Define cognitive dissonance

Define cognitive dissonance and provide an example from your own experience.

  What is the value of right-apple pty ltd

Apple Pty Ltd needs $1.1 billion of new equity. Market price is $40.00 per share. Apple Pty Ltd decides to raise additional funds by offering

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd