Ex 1. Calculate the cost of equity of Company A considering that the weighted average cost of
Question:
Ex 1. Calculate the cost of equity of Company A considering that the weighted average cost of capital (WACC) is 3,67%, the total value of debt and equity is 12,647,298, and the company holds 35% in debt.
Ex 2. Company B paid dividend in 2021 of 1,7 USD, in line with the expected dividend growth of 5% each year. Company C has announced it expects to pay a 2,1 dividend to common shareholders in 2022, and its cost of equity (CAPM) is of 8.9%. (Company's C paid dividend in 2020 of 2).
a. Which company has the most expensive share price ?
b. Would you rather buy stocks of Company B or C considering that Company B stock is trading at 27 and Company C stock at 99
Ex 3. Company D is considering 2 investments: implementing ion-battery or upgrading its current automated factory in the US. How would the Financial Manager compares those 2 options considering the following investments and returns of both options:
Principles of managerial finance
ISBN: 978-0132479547
12th edition
Authors: Lawrence J Gitman, Chad J Zutter