What would be cost of new equity

Assignment Help Financial Management

Reference no: EM132036813

Banyan Co.’s common stock currently sells for $35.25 per share. The growth rate is a constant 12.6%, and the company has an expected dividend yield of 2%. The expected long-run dividend payout ratio is 30%, and the expected return on equity (ROE) is 18%. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of new equity? Round your answer to two decimal places.

Reference no: EM132036813

Questions Cloud

What is the company expected growth rate : What is the company's expected growth rate? what portion of its net income is the firm expected to pay out as dividends?

What is the cost of the preferred stock : Travis Industries plans to issue perpetual preferred stock with an $11.00 dividend. What is the cost of the preferred stock, including flotation?

What is evanec cost of retained earnings-rs : What is Evanec's percentage flotation cost, F? What is Evanec's cost of retained earnings, rs?

What is cost of common equity and wacc : The last dividend was D0 = $3.75, and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC?

What would be cost of new equity : New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of new equity?

What would be cost of equity from new stock : If the company issued new stock, it would incur a 12% flotation cost. What would be the cost of equity from new stock?

What is pearson cost of common equity : Pearson's CFO estimates that the company's WACC is 13.30%. What is Pearson's cost of common equity?

What is holmes after-tax cost of debt : If its marginal tax rate is 40%, what is Holmes's after-tax cost of debt?

Futures contract short seller can only gain money : A futures contract short seller can only gain money from her position if the futures price declines over time.

User Account

All Pages