Johnson Production Company paid a dividend yesterday of $3.50 per share. The dividend is
expected to grow at a constant rate of 10% per year. The price of KayCee's common stock today is
$40 per share.
If KayCee decides to issue new common stock, flotation costs will equal $4.00 per
share. KayCee's marginal tax rate is 35%. Based on the above information, the cost of retained
earnings is
A) 26.41%. B) 19.63%. C) 17.55%. D) 20.09%.
B
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IFRS, like U.S. GAAP, require the use of the lower of cost or market method to value inventory, however some differences do exist. Which of the following is not one of the differences?
A) IFRS eliminate the need to use a ceiling in determining market value. B) When write-downs occur, IFRS do not specify how the loss must be categorized in the income statement. C) IFRS allow the reversal of a previous write-down. D) IFRS define market only as replacement value.
The assessment of earnings quality is best accomplished through the use of which one of the following?
a. Balance sheet and cash flow statement. b. Single-step financial statements. c. Single-step income statement, balance sheet, and cash flow statement. d. Multi-step income statement, balance sheet, and cash flow statement.
Building a lasting business friendship based on mutual trust typically takes time.
Answer the following statement true (T) or false (F)
A service station that focuses on foreign car repairs utilizes a differentiated marketing strategy
Indicate whether the statement is true or false