Sentry Manufacturing will pay a dividend next year of $5.57 per share (D1 $5.57). The dividend...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Sentry Manufacturing will pay a dividend next year of $5.57 per share (D1 $5.57). The dividend is expected to grow at a constant rate of 9% per year. The price of Sentry Manufacturing's stock today is $49 per share. Sentry Manufacturing's marginal tax rate is 35%. Based on the above information, the cost of equity is %. (Round to 2 decimal places) Sentry Manufacturing will pay a dividend next year of $5.57 per share (D1 $5.57). The dividend is expected to grow at a constant rate of 9% per year. The price of Sentry Manufacturing's stock today is $49 per share. Sentry Manufacturing's marginal tax rate is 35%. Based on the above information, the cost of equity is %. (Round to 2 decimal places)
Expert Answer:
Answer rating: 100% (QA)
Answer The cost of equity is basically the expectation of the shareholders fr... View the full answer
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
Posted Date:
Students also viewed these accounting questions
-
Proxicam, Inc., is expected to grow at a constant rate of 7 percent. If the companys next dividend, which will be paid in a year, is $1.15 and its current stock price is $22.35, what is the required...
-
Palozzi will pay a dividend next year of 25p. Dividends are then expected to grow at a rate of 15% per annum for three further years after that. The dividend will then grow at 6% per annum for five...
-
The Aldridge Co. is expected to grow at 6% into the indefinite future. Its latest annual dividend was $2.50. Treasury bills currently earn 7% and the S&P 500 yields 11%. a. What price should Aldridge...
-
The Quality Athletics Company produces a wide variety of sports equipment. Its newest division, Golf Technology, manufactures and sells a single product AccuDriver, a golf club that uses global...
-
In doing a five-year analysis of future dividends, the Dawson Corporation is considering the following two plans. The values represent dividends per share. a. How much in total dividends per share...
-
Use Greens Theorem to find the counterclockwise circulation and outward flux for the fields and curves. F = (2xy + x)i + (xy - y)j C: The square bounded by x = 0, x = 1, y = 0, y = 1 THEOREM...
-
The vertical motion of a machine is measured by using the arrangement shown in Fig. 10.43. The motion of the mass \(m\) relative to the machine body is recorded on a drum. If the damping constant...
-
In conducting year-end inventory counts, your audit team is debating the impact of the clients right of return policy both on inventory valuation and revenue recognition. The assistant controller...
-
using the following maturity terms and annual interest rate : Maturity Annual Interest Rate (%) 1 Year 1.25% 2 Years 1.5% 5 Years 2% 10 Years 3% Assuming joe and julia has their first yearly saving...
-
Dance Creations manufactures authentic Hawaiian hula skirts that are purchased for traditional Hawaiian celebrations, costume parties, and other functions. During its first year of business, the...
-
Explain what you think Professor Porter's Five Forces Model means to any business and why a progressive company needs to understand the model. In addition, give an example of a company that you...
-
Short-run costs that increase and decrease as an output increases or decreases are called Group of answer choices a. Secondary costs. b. Derived costs. c. Variable costs. d. Partial costs. e....
-
If a car of mass 2.05e+3kg tows a second car of mass 606kg with a cable (assumed to be massless), what is the tension in the cable when the first car is accelerating at 2.11 m/s
-
In order to explain the US defense budget, you are using the data from 1962 to 1981 with the following variables (all measured in billions USD) and estimate the corresponding model (Model 1):(Use...
-
2. Alan Shepard, an all around badass human being, snuck a 6-iron golf club on board Apollo 14 and famously hit a golf ball on the moon. What a cool dude. The acceleration of gravity on the moon is...
-
A portfolio has 30% of its value in IBM shares and the rest in Microsoft (MSFT). The volatility of IBM and MSFT are 25% and 33%, respectively, and the correlation between IBM and MSFT is 0.6. What is...
-
Estimate the future value of your retirement account based on the following assumptions. You contribute $500 per month and your employer matches 50% of your contribution. You invest the monthly...
-
Describe basic managerial approaches to implementing controls and how these are implemented.
-
Corporate bonds issued by Johnson Corporation currently yield 8%. Municipal bonds of equal risk currently yield 6%. At what tax rate would an investor be indifferent between these two bonds?
-
The second acquisition target is a privately held company in a growing industry. The target has recently borrowed $40 million to finance its expansion; it has no other debt or preferred stock. It...
-
The balance sheet of Roop Industries is shown below. The 12/31/2010 value of operations is $651 million, and there are 10 million shares of common equity. What is the intrinsic price per share?...
-
Trust Management System: A university would like to develop a system for students to evaluate their peers performance in some group projects. Students ratings in various categories will affect a...
-
Building trust in potential students to join music classes by a music teacher a. Explain the above scenario. b. Draw a class diagram for it. c. Document a detailed and significant use case. d. Create...
-
Building trust in parents by hostel authorities to state that hostel is safe for students to live a. Explain the above scenario. b. Draw a class diagram for it. c. Document a detailed and significant...
Study smarter with the SolutionInn App