The Charger’s common stock is expected to pay a $6 dividend. If the stock is currently selling for $40 and the growth rate in dividends is expected to be 12%, what is the after-tax cost of this stock? Assume a tax rate of 40%.

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A: The dividend is the interest paid to shareholders on outstanding shares.

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A: Answer and calculations are given below

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A: Excel Spreadsheet:

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A: Excel Spreadsheet:

Q: Bates, Inc. pays a dividend of $1.00 and is currently selling for $32.50. If investors require a 12%…

A: Calculation of growth rate: Answer: Growth rate is 8.66%

Q: a. MF Corp. has an ROE of 16% and a plowback ratio of 50%. If the coming year’s earnings are…

A: ROE=16% Plow back ratio(b) = 50% Earnings per share(EPS) = 2 Market capitalization rate = 12%

Q: By how much would the cost of new stock exceed the cost of retained earnings?

A: Retained earnings are the revenues or profits that an organization has produced to date, less any…

Q: The common stock of Balinger Machines pays an annual dividend that is expected to increase by 8%…

A: The expected dividend (D1) can be calculated with the help of dividend growth model

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A: Given information: Annual dividend is $0.65 per share, Price of a share of the stock is $81.25

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A: Growth Rate: It refers to the percentage change of a particular variable for a given period of…

Q: Lala Ltd's stock currently sells for $5 per share. The company just paid an annual dividend of…

A: Current price (P0) = $5 D0 = $0.50 Growth rate (g) = 6% r = Expected return

Q: How much are you willing to pay today for one share of stock if the company just paid a $1.85 annual…

A: Last dividend = $1.85 Growth rate = 0.06 Required return = 0.14 Stock price = ?

Q: A stock is selling today for $40 per share. At the end of the year, it pays a dividend of $2 per…

A: Rate of return : it means , what an investor is earning on investment amount in shares. it includes…

Q: Salte Corporation is issuing new common stock at a market price of $27.00. Dividends last year were…

A: The below expression can be used to calculate cost of common equity:

Q: A firm is paying an annual dividend of $2.65 for its preferred stock that is selling for $57.00.…

A: Annual Dividend = $2.65 Selling Price =$57 Selling Cost = $3.30

Q: TSC, Inc. sells for $24 and pays an annual per share dividend of $2.10, which you expect to grow at…

A: We will have to use the dividend discount model here.

Q: XYZ Inc’s most recent dividend was $20 per share. Dividends are expected to grow at an 9% annual…

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Q: TSC, Inc. sells for $26 and pays an annual per share dividend of $1.00, which you expect to grow at…

A: Given Value of the share (P) = $26 Dividend per share (D0) = $1 Growth rate = 8% Using the Gordon…

Q: A company has an issue of preferred stock outstanding that pays a $2.30 dividend every year in…

A: Hi, due to unavailability of HP10bii+ Financial calculator, we will answer this question using…

Q: 2. The current price on a stock is 240 lei and the expected dividend equals 11 lei per share. One…

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Q: Sorensen Systems Inc. is expected to pay a $2.00 dividend at year end (D1 = $2.00), the dividend is…

A: wacc formula is given as: WACC =wd×kd×1-tax+we×kewhere,wd= weight of debtwe= weight of equitykd=cost…

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A: Dividend :::33$*14%=$4.62....

Q: She Goes, Inc., will pay a year-end dividend of $3 per share. Investors expect the dividend to grow…

A: The stock price can be computed using the Gordon growth model.

Q: An issue of common stock currently sells for $60 per share and expected to pay $4 dividend per share…

A: Given the following information: Current price of stock: $60 per share Estimated dividends for the…

Q: Corporation B is a normal-growth company that expects to earn 14% on reinvested earnings. If the…

A:

Q: A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per…

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Q: Last year Artworks, Inc. paid a dividend of $1.75. You anticipate that the company’s growth rate is…

A: Formula:

Q: Jefferson's recently paid an annual dividend of $2 per share. The dividend is expected to decrease…

A: The Gordon growth model is used to determine the stock price based on a future series of dividends…

Q: Under peso-cost averaging, an investor will purchase P6,000 worth of stock each year for three…

A: The peso-cost averaging is a method of investing in stocks where a particular amount is set aside…

Q: What is the cost of internal common equity (retained earnings) if the long-term growth in dividends…

A: The cost of retained earnings doesn't involve any explicit cost but involves the opportunity cost.…

Q: MF Corp. has an ROE of 17% and a plowback ratio of 60%. The market capitalization rate is 14%.  a.…

A: a) Growth rate (g) = ROE * plowback rate  g = 17 * 0.60 g = 10.20% D1 (Next year's dividend per…

Q: the investor's required rate of return is 15 percent, the expected level of earnings at the end of…

A: Price of equity can be determined by the dividend discount model and P/E ratio method.

Q: A stock is selling today for $40 per share. At the end of the year, it pays a dividend of $2 per…

A: The question is based on the concept of calculation of total return in stock investment. The total…

Q: Jarett & Son's common stock currently trades at $30.00 a share. It is expected to pay an annual…

A: Part 1 When equity is financed through all Retained earnings, then the cost of equity based on…

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A: The stock return refers to the difference between the closing stock price and the initial stock…

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Q: What is the component cost of preferred stock for a company that has $20 million in preferred stock…

A: Relevant information: Price of stock : $75 (Par value is used while computing the cost of preferred…