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Total Return 27% Capital gain Yield 25% Dividend Yield 2% Initial Price 100 Dividend  2 Ending

Price 125 Total Return 24% Annual Dividend 4 Purchase price 100 Current price 120 Expected Return 13.40% Beta 1.2 Market Return 12% Risk free rate 5% WACC 10.58% Stock 80% Debt 20% Cost of equity 12% After tax cost of debt 4.90% Initial Cost  $ 134.29 Cost of plant 125 Debt equity ratio 0.75 % of debt 0.428571 % Of Equity 0.571429 Portion funded through Debt 53.57143 Portion funded through Equity 71.42857 Flotation cost of debt 2.142857 Flotation cost of Equity 7.142857 Total Flotation Cost 9.285714


Hello! Can you please help provide context and rationale as to why companies make financial decisions based on this info?


Thank you,

Top Answer

Dear student decisions are given... View the full answer

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Answer - Decisions
Page :
Date:
1
As total Return is 27 %, capital gain yield is
25 01 & Dividend yield is 2 % Total Return
& capital gain is good but dividend yield
Should Increased by...

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