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Black Stone Furnaces wants to build a new facility. The cost of capital for this...

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Accounting

Black Stone Furnaces wants to build a new facility. The cost of capital for this investment is primarily dependent on which one of the following?

Firm's overall source of funds
Source of the funds used to build the facility
Current tax rate
The nature of the investment
Firm's historical average rate of return
Which of the following features are advantages of the dividend growth model?

I. Easy to understand
II. Model simplicity
III. Constant dividend growth rate
IV. Model's applicability to all common stocks
II only
I and III only
II and IV only
I and II only
I, II, and III only
Tom and Jerri currently own 300 shares of Alpha stock. Each share is currently worth $36. What will Tom and Jerri's investment in Alpha be worth if the company declares a 4-for-3 stock dividend?
$6,075
$10,800
$19,000
$21,600
$28,800

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