Keyes - $70.00 Cost of equity 5.14 Floatation cost 5 Cost...

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Question 7-2 Dividend 1.5 Cost of equity 15% Growth 7% Price per share 18.75 Question 7-4 Dividend 5 Price 50 Rate of return 10% Question 7-5 Current dividend 2 Growth 20% Dividend year 1 $2.40 Dividend year 2 $2.88 Growth rate in year 3 7% Dividend year 3 $3.08 Beta 1.2 Risk free return 7.50% Market risk premium 4% Cost of equity 12.3% PV of dividend Year 1 $2.14 Year 2 $2.28 Terminal value $46.10 Price per share $50.53 Question 9-2 Yield to maturity 8% Tax 35% Post tax cost of debt 5.2% Question 9-4 Dividend $3.60 Current market price
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Unformatted text preview: $70.00 Cost of equity 5.14% Floatation cost 5% Cost of preferred sto 5.41% Question 9-5 Current price 36 Dividend 3 Growth 5% Cost of equity 13.33% Question 9-6 Beta 0.8 risk free rate 6% Market return 15% Market risk premium 6% Cost of capital 10.4% Question 9-7 Capital Weight cost of capTarget capital structure Debt 300 50% 3.6% 30% Preferred 50 8.33% 5.8% 5% Equity 250 41.67% 12% 65% Total 600 WACC 9.17%...
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This note was uploaded on 12/04/2011 for the course ECONOMICS 201 taught by Professor Rcollier during the Spring '10 term at Portland CC.

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