Reference no: EM132053015

1. Martin Corporation's common stock is currently selling for $50 per share. The current dividend is $2.00 per share. If dividends are expected to grow at 6 percent per year and if flotation costs are 10 percent, then what is the firm's cost of retained earnings and what is its cost of new common stock?

a. 10.24%; 10.71%

b. 10.24%; 11.38%

c. 9.31%; 9.86%

d. 10.71%; 10.24%

e. 11.38%; 10.71%

2. A firm has an inventory turnover of 8.11, an inventory period of 45 days, average inventory of $650,000, a receivables period of 32 days, and average payables of $750,000. What is its cash cycle

A) 40 days

B) 34 days

C) 25 days

D) 18 days