What is the cost of capital

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1. Assume that A limited paid a dividend of 20.7 cents per share just recently. The shares currently sell for $10.1. You also estimate that the dividend will grow steadily at 2.5 % per year into the indefinite future. What is the cost of capital, ke for A limited? Answer as a percentage accurate to two decimal places (11.32% should be entered as 11.32). Do not enter the % sign.

2. A company has annual net operating cash flow (X) of 1.2 million dollars in perpetuity and the market value of its capital (V) is 10.5 million dollars. What is the company's cost of capital k o? Provide your answer as a percentage to two decimal places. Do not enter the % sign

3. XYZ Corporation has just paid a dividend of 53 cents per share. The current market price of the share is $16 and shareholders require a return of 10 % pa. What is the annual growth rate (g) of the dividends? Answer as a percentage accurate to two decimal places. Do not enter the % sign.

4. What is the cost of capital for bank overdraft (kbo). The overdraft rate is 7.2 % pa compounded 12 times a year? Answer as a percentage to two decimal places (2.12% should be entered as 2.14). Do not enter the % sign.

Reference no: EM132386227

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