Phillips Enterprises Inc is expected to pay a dividend of $2.60 next year. Dividends are expected to
grow at a constant rate of 8% per year, and the stock price is currently $20.00.
New stock can be
sold at this price subject to flotation costs of 15%. The company's marginal tax rate is 35%. Compute
the cost of internal equity (retained earnings) and the cost of external equity (new common stock),
respectively.
A) 21.00%, 23.29% B) 0, 21.00% C) 8.00%, 23.29% D) 23.00%, 25.48%
A
You might also like to view...
In a short essay, list and discuss the four primary scales of measurement. Include an example of how each scale of measurement is used in marketing research
What will be an ideal response?
According to adaptive leadership theory, who solves adaptive challenges?
A. employees B. leaders and followers C. leaders D. the organization
The support staff is especially influential in a(n) ______ organizational form.
A. adhocracy B. strategic apex C. international strategy D. operating core
The owner of the new Sharp Scissors hair salon gave coupons to potential customers walking by her store to stimulate interest and offer a trial of her new hair salon. The coupons are an example of
A. a channel of distribution. B. advertising. C. publicity. D. sales promotion. E. media.