a. Wayne Company Limited's next annual dividend will be 2.40 per share. Its current stock price...
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a. Wayne Company Limited's next annual dividend will be 2.40 per share. Its current stock price is 32= per share and growth rate of earnings and dividends is 6.5%. The floatation costs are 15% of market price Required Compute the cost of . Retained earnings (3 Marks) II. New Common equity (3 Marks) b. Assume that Wayne Company Limited has the following Capital Structure. Debt Preferred Stock 40% 10% Common Equity 50% Given are the after-tax costs Cot of Debt is 5.6% Cost of preferred stock is 10.6 % Cost Retained Earnings Cost of new equity 13% 14% I Because the firm expects to have a sizable amount of retained earnings Sh.300.000/= It plans to initially use it for expansion. When the retained earnings are exhausted, it must use new common stock. In addition, the firm expects that it can borrow only Sh.400.000/- of debt at a cost of 5.6% additional debt will have an after-tax cost of 8,4% Required Determine Breaks in MCC Schedule. (14 Marks) a. Wayne Company Limited's next annual dividend will be 2.40 per share. Its current stock price is 32= per share and growth rate of earnings and dividends is 6.5%. The floatation costs are 15% of market price Required Compute the cost of . Retained earnings (3 Marks) II. New Common equity (3 Marks) b. Assume that Wayne Company Limited has the following Capital Structure. Debt Preferred Stock 40% 10% Common Equity 50% Given are the after-tax costs Cot of Debt is 5.6% Cost of preferred stock is 10.6 % Cost Retained Earnings Cost of new equity 13% 14% I Because the firm expects to have a sizable amount of retained earnings Sh.300.000/= It plans to initially use it for expansion. When the retained earnings are exhausted, it must use new common stock. In addition, the firm expects that it can borrow only Sh.400.000/- of debt at a cost of 5.6% additional debt will have an after-tax cost of 8,4% Required Determine Breaks in MCC Schedule. (14 Marks)
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Wayne Company Limited Capital Cost Calculations a Cost of Capital I Retained Earnings Cost of Retained Earnings or Ke We are given the growth rate g 6... View the full answer
Related Book For
Financial Management Theory and Practice
ISBN: 978-1305632295
15th edition
Authors: Eugene F. Brigham, Michael C. Ehrhardt
Posted Date:
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