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NEW QUESTION: 1
Your company's stock sells for $50 per share, its last dividend was $2.00, its growth rate is a constant 5 percent, and the company would incur a flotation cost of 15 percent if it sold new common stock. Net income for the coming year is expected to be $500,000, the firm's payout ratio is 60 percent, and its common equity ratio is 30 percent. If the firm has a capital budget of $1,000,000, what component cost of common equity will be built into the WACC for the last dollar of capital the company raises?
A. 11.75%
B. 9.20%
C. 9.94%
D. 12.30%
E. 10.50%
Answer: C
Explanation:
Explanation/Reference:
Explanation:
BP(RE) = RE/Equity fraction = $500,000(0.4)/0.3 = $666,667. BP
= break point; RE = retained earnings
Since the capital budget will be $1 million, and since all equity in the WACC beyond $666,667 will be external equity, the WACC of the last dollar raised will include equity at a cost of k(e):
k(e) = $2(1.05)/$50(1 - 0.15) + .05 = 9.94%.
NEW QUESTION: 2
온 - 프레미스 레거시 응용 프로그램은 로컬로 데이터 파일을 캐싱하고 공유 이미지를 로컬 디스크에 작성합니다.
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Answer: C
NEW QUESTION: 3
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A. 끝납니다.
B. 지연.
C. 시작됩니다.
D. 이상.
Answer: A
NEW QUESTION: 4
A strategy to communicate change to an organization's information management systems or processes should (Choose 2)
A. Select preferred senders of the communication.
B. Identify and segment audience groups.
C. Define one channel for communication.
D. Send the same message to everyone.
Answer: A,B
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