What the estimated cost of common stock equity is

Assignment Help Financial Accounting
Reference no: EM132944254

Problem 1: A firm has a beta of 1.2. The market return equals 14 percent and the risk- free rate of return equals 6 percent. The estimated cost of common stock equity is

A) 14 percent.

B) 6 percent.

C) 7.2 percent.

D) 15.6 percent.

Problem 2: A firm has common stock with a market price of $25 per share and an expected dividend of $2 per share at the end of the coming year. The growth rate in dividends has been 5 percent. The cost of the firm's common stock equity is

A) 5 percent.

B) 8 percent.

C) 13 percent.

D) 10 percent.

Reference no: EM132944254

Questions Cloud

What the rate of interest for week two is : What the rate of interest for week 2 is? The Bensington Glass Company entered into a loan agreement with the? firm's bank to finance the? firm
Calculate the time-weighted geometric average return : A manager buys three shares of stock today, and then sells one of those shares each year for the next 3 years. Calculate time-weighted geometric average return
Determine the value today : Determine the value today, May 1, 2021 of one of these bonds to an investor who requires a 6 percent return on these bonds. Why is the value today
What would be the cost of new common stock equity : What would be the cost of new common stock equity for Tangshan Mining if the firm just paid a dividend of $4.25, the stock price is $55.00
What the estimated cost of common stock equity is : A firm has a beta of 1.2. The market return equals 14 percent and the risk- free rate of return equals 6 percent. The estimated cost of common stock equity is
Should barow pay the bank : The bank quotes an FRA rate of 8% for the loan. If the actual rate on October 1 is 10%, how much interest in pesos, should Barow pay the bank
What approximate after- tax cost of debt for twenty year : The cost of issuing and selling the stock was $2 per share. The firm's marginal tax rate is 40 percent. The cost of the preferred stock is
What the after tax cost of debt for tangshan mining would be : What the after tax cost of debt for Tangshan Mining would be? Tangshan Mining is considering issuing long- term debt. The debt would have a 30 year maturity
What is the required rate of return on tangshan stock : Tangshan China's stock is currently selling, Assuming Tangshan China's most recent dividend was $5.50, what is the required rate of return on Tangshan's stock?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Journalize the two entries required to close the accounts

Journalize the two entries required to close the accounts. After the accounts have been adjusted at December 31, the end of the fiscal year

  Cathy steals the note from bob

Allan makes a promissory note for $1000 payable to the order of Bob. Cathy steals the note from Bob, indorses (forgets) Bob's name on the back, and gives it to David, in exchange for a TV set. David negotiates the note for value to Emma.

  What does the beta of a stock measure

What are the portfolio weights of the three stocks in your portfolio? What is the expected return of your portfolio and What does the beta of a stock measure

  Calculate the amount of impairment loss for the cgu

Calculate the amount of impairment loss for the CGU that would be determined and prepare the journal entries in accordance with the requirements of AASB 136

  How would we find the value of his contract today

Assuming end of year payments of the proceeds of the contract, how would we find the value of his contract today if the player has a discount rate of 12%

  Provide three of these key tenets of srm

SRM software varies based on capabilities offered. AMR reseach has identified 5 areas of distinction for an SRM system. Provide three of these key tenets of SRM

  Lessor in an operating lease transaction

1. The lessee makes a lease payment of $89,580 to the lessor in an operating lease transaction.

  Explain how the double-declining-balance method is computed

Explain how the double-declining-balance method is computed. Provide an example of how this method could be used on the new delivery truck purchased for $300,000 to be used for 4 years with a salvage value of $5,000 for year one only.

  How much can pay out as a scholarship

the first semi-annual payout scholarship will be awarded exactly 2 years after the funds are deposited. How much can they pay out as a scholarship?

  Deferred tax consequences of the valuation allowance

Saginaw Inc. completed its first year of operations with a pretax loss of $500,000. The tax return showed a net operating loss of $600,000, which the company will carry forward. The $100,000 book-tax difference results from excess tax depreciation ov..

  Prepare journal entries to record issuance of the note

Prepare journal entries to record (a) issuance of the note, (b) accrual of interest on December 31, and (c) payment of the note at maturity.

  How much is the balance of the fair value of plan assets

Information on Complicated Company's defined benefit plan, How much is the balance of the fair value of plan assets as of year-end?

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