What is the companys cost of equity capital

Reference no: EM13265527

Blair Brothers' stock currently has a price of $50 per share and is expected to pay a year-end dividend of $2.50 per share (D1 = $2.50). The dividend is expected to grow at a constant rate of 4 percent per year. The company has insufficient retained earnings to fund capital projects and must, therefore, issue new common stock. The new stock has an estimated flotation cost of $3 per share. What is the company's cost of equity capital?

Reference no: EM13265527

Questions Cloud

Obtain the amplitude of the motion : The position of an object connected to a spring varies with time according to the expression x = (4.8 cm) sin(9.3 ?t). Find the amplitude of the motion

Describe and calculate the mass of solution in a pipette : Explain and calculate the mass of solution in a pipette if the following data has been recorded during a lab experiment

Waiting for jew - summary of hotel rwanda movie : People who live in religion society, they shouldn't show off their religion believes to those who don't, because they won't like the reaction of that. Jonathan had experienced a lot of problem in his life and moving was one of them.

What is the value if idand vgs at the location : In n-channel JFET, Ohmic region is separated from Saturation region by VP so called Pich-off voltage or VGS(OFF). What is the value if IDand VGS at this location and how we can calculate the value of VP from ID and VGS

What is the companys cost of equity capital : The new stock has an estimated flotation cost of $3 per share. What is the company's cost of equity capital?

Find the number of units sold : Find the number of units sold where the pretax operating cash flow is the same whether the firm chooses the large or small factory.

What is the maximum load current that can be supplied : Two parallel connected 10 kV to 120 V 60 Hz single phase transformers supply a varying load. Assuming 0.85 PF, what is the maximum load current that can be supplied by this parallel combination of transformers wihout overloading either of them

What is the current stock price according to the growth : The Belgium Bike Company just paid an annual dividend of $1.12. If you expect a constant growth rate of 4% and have a reqquired rate of return of 13%, what is the current stock price according to the constant growth dividend model?

Explain what is the mole percent of butane in the mixture : If the weight of the gas in the bulb is 0.3554 g, what is the mole percent of butane in the mixture. Set up two equations to solve simultaneously for the two unknowns, the moles of ethane and butane.

User Account

All Pages