What is the cost of common stock

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Question: Pharoah Markup Company has total debt obligations with book and market values equal to $30 million and $28 million, respectively. It also has total equity with book and market values equal to $25 million and $70 million, respectively. If you were going to buy all of the assets of Pharoah Markup today, how much should you be willing to pay?

Carla Vista Tire Co. just paid an annual dividend of $1.70 on its common shares. If Carla Vista is expected to increase its annual dividend by 4.10 percent per year into the foreseeable future and the current price of Carla Vista's common shares is $14.23, what is the cost of common stock for Carla Vista? (Round intermediate calculations to 4 decimal places, e.g. 0.1555 and final answer to 2 decimal places, e.g. 15.25%.)

Reference no: EM132970243

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