What is this firms cost of equity

Assignment Help Financial Management
Reference no: EM13929996

Sweet Treats common stock is currently priced at $17.15 a share. The company just paid $1.22 per share as its annual dividend. The dividends have been increasing by 2.4 percent annually and are expected to continue doing the same. What is this firm's cost of equity?

9.41 percent

9.51 percent

8.47 percent

9.68 percent

9.82 percent

Reference no: EM13929996

Questions Cloud

Higher gross profit figure : Provides the higher Gross Profit figure. Provides the most information for control purposes,
Two mutually exclusive design projects : The Sloan Corporation is trying to choose between the following two mutually exclusive design projects: Year Cash Flow (I) Cash Flow (II) If the required return is 12 percent, what is the profitability index for both projects?
Corporate strategy that fixes its annual dividend : Brash Corporation initiated a new corporate strategy that fixes its annual dividend at $2.25 per share forever. If the risk-free rate is 4.5% and the risk premium on Brash’s stock is 10.8%, what is the value of Brash's stock?
What is the value of stackers stock : Stacker Weight Loss currently pays an annual year-end dividend of $1.20 per share. It plans to increase this dividend by 5% next year and maintain it at the new level for the foreseeable future. If the required return on this firm's stock is 8%, what..
What is this firms cost of equity : Sweet Treats common stock is currently priced at $17.15 a share. The company just paid $1.22 per share as its annual dividend. The dividends have been increasing by 2.4 percent annually and are expected to continue doing the same. What is this firm's..
Option is best from the insurers perspective : A delivery driver for appliance Warehouse (AW) struck and killed a pedestrian in a crosswalk. The widow of the man killed has threatened to sue AW for wrongful death. Assume a 6% discount rate, which settlement option is best from the insurer's persp..
What is the present value of the interest rate tax shield : Symual Co. keeps a constant debt-to-ratio policy. The company has an expected EBITDA that perpetually grows at a 2% annual rate. All the assets are fully depreciated. At the moment the debt-to-ration is 1/3 and the cost of debt is 3.75%. The unlevere..
What is the return on your portfolio : Your stock portfolio consists of only two stocks. You have $15,000 in Company A and $25,000 in Company B. Company A has an actual return of -8% and Company B has a return of 12%. What is the return on your portfolio?
Calculate the return on invested capital for each firm : Firms HL and LL are identical except for their leverage ratios and the interest rates they pay on debt. Each has $18 million in invested capital, has $5.4 million of EBIT, and is in the 40% federal-plus-state tax bracket. Calculate the return on inve..

Reviews

Write a Review

Financial Management Questions & Answers

  Retirement account that pays interest compounded monthly

You are to make monthly deposits of $725 into a retirement account that pays 10.1 percent interest compounded monthly.

  Violation of weak form efficiency

Which among the following is a violation of weak form efficiency?

  You have decided to pursue an mba degree either to further

you have decided to pursue an mba degree either to further your career start a new career or achieve a personal goal.

  Qwikshare is a new not-for-profit organization

QwikShare is a new not-for-profit organization that will rent low-emissions automobiles at QwikStops in suburban areas in order to provide an environmentally friendly transportation option to its customers.

  tax rate-Computer-based order entry system

Your firm is contemplating the purchase of a new $660,000 computer-based order entry system. The system will be depreciated straight-line to zero over its six-year life. It will be worth $51,000 at the end of that time.

  What is enterprise value-EBITDA multiple for this company

The market value of the equity of Thompson, Inc., is $780,000. The balance sheet shows $51,200 in cash and $248,100 in debt, while the income statement has EBIT of $109,100 and a total of $180,700 in depreciation and amortization. What is the enterpr..

  What will the firms new operating cycle be

Happy Enterprises currently has an operating cycle of 62 days. The firm is analyzing some operational changes, which are expected to increase the accounts receivable period by 2 days and decrease the inventory period by 5 days. The accounts payable t..

  Option is best from the insurers perspective

A delivery driver for appliance Warehouse (AW) struck and killed a pedestrian in a crosswalk. The widow of the man killed has threatened to sue AW for wrongful death. Assume a 6% discount rate, which settlement option is best from the insurer's persp..

  Accounts receivable turnover and inventory turnover

Jim Short's Company makes clothing for schools. Sales in 2013 were $4,820,000. Assets were as follows: Cash ($163,000), Accounts receivables ($889,000) Inventory ($411,000) Net equipment ($520,000) Total assets ($1,983,000):

  Grow by maintaining a constant mix of debt and equity

The estimate of how quickly a firm may grow by maintaining a constant mix of debt and equity is called:

  What is the current bond price

Ninja Co. issued 10-year bonds a year ago at a coupon rate of 8.8 percent. The bonds make semi-annual payments. If the YTM on these bonds is 7.1 percent, what is the current bond price? Also how would I enter this in a finical?

  Statements concerning junk bonds

Which of the following statements concerning junk bonds is most correct?

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