1- Expected cash dividends are $4.00, the dividend yield is 6%, flotation costs are 7% of price,...

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Finance

1-
Expected cash dividends are $4.00, the dividend yield is 6%,flotation costs are 7% of price, and the growth rate is 3%. Computethe approximate cost of new common stock. (Do not roundintermediate calculations. Round your answer to 2 decimalplaces.)
9.20%
10.45%
9.45%
11.55%
2-
Pedro Gonzalez will invest $22,000 at the beginning of each yearfor the next 8 years. The interest rate is 11 percent. What is thefuture value? Use Appendix C to calculate the answer.
$260,898.
$289,608.
$311,608.
$280,644.

Answer & Explanation Solved by verified expert

3.9 Ratings (503 Votes)

1Information provided Expected cash dividend 4 Dividend yield 6 Flotation cost 7 Growth rate 3 The question is solved by first computing the current price of the stock Dividend yield is calculated using the below formula Dividend Yield Annual See Answer

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1-Expected cash dividends are $4.00, the dividend yield is 6%,flotation costs are 7% of price, and the growth rate is 3%. Computethe approximate cost of new common stock. (Do not roundintermediate calculations. Round your answer to 2 decimalplaces.)9.20%10.45%9.45%11.55%2-Pedro Gonzalez will invest $22,000 at the beginning of each yearfor the next 8 years. The interest rate is 11 percent. What is thefuture value? Use Appendix C to calculate the answer.$260,898.$289,608.$311,608.$280,644.