Problem 11-17 Costs of retained earnings and new common stock [LO11-3] Compute Ke and Kn under...

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Problem 11-17 Costs of retained earnings and new common stock[LO11-3] Compute Ke and Kn under the following circumstances: a. D1= $7.00, P0 = $78, g = 4%, F = $3.00. (Do not round intermediatecalculations. Round your answers to 2 decimal places.) b. D1 =$0.40, P0 = $38, g = 5%, F = $2.00. (Do not round intermediatecalculations. Round your answers to 2 decimal places.) c. E1(earnings at the end of period one) = $6, payout ratio equals 30percent, P0 = $42, g = 10.0%, F = $3.50. (Do not round intermediatecalculations. Round your answers to 2 decimal places.) d. D0(dividend at the beginning of the first period) = $4, growth ratefor dividends and earnings (g) = 5%, P0 = $68, F = $5.

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Answer a Cost of Retained Earnings Ke D1 P0 g Cost of Retained Earnings Ke 700 7800 004 Cost of Retained Earnings Ke 01297 or 1297 Cost of New Common Stock Kn D1 P0 F g Cost of New Common Stock Kn 700 7800 300 004 Cost of New Common Stock Kn 700 See Answer

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Problem 11-17 Costs of retained earnings and new common stock[LO11-3] Compute Ke and Kn under the following circumstances: a. D1= $7.00, P0 = $78, g = 4%, F = $3.00. (Do not round intermediatecalculations. Round your answers to 2 decimal places.) b. D1 =$0.40, P0 = $38, g = 5%, F = $2.00. (Do not round intermediatecalculations. Round your answers to 2 decimal places.) c. E1(earnings at the end of period one) = $6, payout ratio equals 30percent, P0 = $42, g = 10.0%, F = $3.50. (Do not round intermediatecalculations. Round your answers to 2 decimal places.) d. D0(dividend at the beginning of the first period) = $4, growth ratefor dividends and earnings (g) = 5%, P0 = $68, F = $5.