Financial Management

posted by .

A firm's stock is selling for $85, Dividend yield=5%. A 7% growth rate is expected for the common stock. The firm's tax rate is 32%. (question) What is the firm's cost of retained earnings?
a)8.16%
b)12.00%
c)12.35%
d)cannot be determined

  • Financial Management -

    12%

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. value of common stock

    • Emerson Electric common stock that is selling for $80 with a par value of $5. This stock recently paid a $2.10 dividend, and the firm’s earnings per share have increased from $2.40 to $4.48 in the past 5 years. An equivalent …
  2. stocks

    • Emerson Electric common stock that is selling for $80 with a par value of $5. This stock recently paid a $2.10 dividend, and the firm’s earnings per share have increased from $2.40 to $4.48 in the past 5 years. An equivalent …
  3. Financial Management (Math)

    1. Bob’s Country Bunker (BCB), a chain of economically priced motels in the Midwestern United States has reviewed its current target structure of 40% debt and 60% equity. It can issue debt at a rate of 9%. The last dividend paid …
  4. Finance

    Emerson Electric common stock is selling for $36.75. par value is $5. stock recently paid $1.32 in dividend and the firm's earnings per share increased from $1.49 to $3.06 in the past 5 years. The firm expects to grow at the same rate …
  5. Finance

    Byron Corporation's target capital structure consists of 40% debt and 60% common equity. Assume that the firm has no retained earnings. The company's the last dividend (Do) was $2.00, which is expected to grow at a constant rate of …
  6. fin 3030

    2. A new common stock issue paid a $1.50 dividend last year. The par value of the stock is $25, and earnings per share have grown at a rate of 3% per year. This growth rate is expected to continue into the foreseeable future. The company …
  7. finanace

    Compute the cost of the capital for the firm for the following:?
  8. fin 370

    (individual or component costs of capital)Compute the cost of the capital for the firm for the following:?
  9. fin 370 # 2

    (individual or component costs of capital) Your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. To help in this, compute the cost of capital for the firm for the following: …
  10. fin 370 # 2

    (individual or component costs of capital) Your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. To help in this, compute the cost of capital for the firm for the following: …

More Similar Questions