question archive Q1) Expected cash dividends are $2

Q1) Expected cash dividends are $2

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Q1)

Expected cash dividends are $2.00, the dividend yield is 8%, flotation costs are 6% of price, and the growth rate is 2%. Compute the approximate cost of new common stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Q2

The coupon rate on a debt issue is 9%. If the yield to maturity on the debt is 9%, what is the after-tax cost of debt in the weighted average cost of capital if the firm's tax rate is 35%? (Round your answer to 2 decimal places.)

Q3

A firm's stock is selling for $85. The next annual dividend is expected to be $4.00. The growth rate is 7%. The flotation cost is $7. What is the cost of retained earnings? (Round your answer to 2 decimal places.)

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