Bouchard Company's stock sells for $20 per share, its last dividend (D0) was $1.00, its growth rate is a constant 6 percent, and the company would incur a flotation cost of 20 percent if it sold new common stock. Which of the following is the cost of issuing new common stock? (Round off the answer to two decimal places.)?
A. ?11.96 percent
B. ?12.25 percent
C. ?12.63 percent
D. ?10.24 percent
E. ?11.42 percent
Answer: C
You might also like to view...
In the two-period model, suppose a household's income in the first period is $40,000, income in the second period is $30,000, and the real interest rate is 25 percent. Draw a diagram showing the budget constraint. Now, suppose the real interest rate rises to 30 percent. Draw the new budget constraint. For the budget constraints you have drawn, be sure to show the values of the intercepts on each axis. If the household decides that its consumption in period 1 should always equal its consumption in period 2, determine whether the household is worse off or better off because of the decline in the real interest rate. Show your work.
What will be an ideal response?
When conducting a meeting over a meal, which of the following would be the most appropriate topics of conversation?
A) Politics B) Wine knowledge C) Family D) Religion E) Use of technology
According to research conducted by Canadian cultural anthropologists, Canadians place a high importance on personal relationships. This leads them to be extremely reluctant to buy through an impersonal medium like a telephone. For an insurance company that was hoping to sell insurance through telemarketers, this research would be an example of
A. a dependent variable. B. a constraint. C. external secondary data. D. internal secondary data. E. an assumption.
The Student t distribution with parameter v = 4 has a variance V(t) equal to:
a. 4 b. 0 c. 2 d. 1