Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. 1)tobins toys has decided to expand by opening 20

1)Tobins Toys has decided to expand by opening 20 new stores. Their stock is selling...

50.1K

Verified Solution

Question

Finance

1)Tobins Toys has decided to expand by opening 20 new stores. Their stock is selling for $20 and is what Tobins Toys plans to offer the new stocks for, but will have to pay $1 in flotation costs. Yesterday Tobins Toys paid a dividend of $0.50. Tobins Toys has continuously guaranteed their dividend will grow by 2.5% a year. What must be Tobins cost of common stock?

2)Stobins Toys has decided to expand by opening 25 new stores. Yesterday Stobins Toys paid a dividend of $1.25. Stobins Toys earned $75 after flotation costs. If Stobins cost of issuing these shares was 15% what is the growth rate assumed using the Dividend Growth Model?

3)PBJ is expanding is production. The expansion will be financed by issuing new 25-year, $1,000 par, 10.25% annual coupon bonds paid semiannually. The market price of each bond is $975. Flotation expense on the new bonds will be $30 per bond. PBJs marginal tax rate is 38%. What is the after-tax cost of debt for the newly-issued bonds?

Could someone help with those questions please!

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students