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1) weaver brothers expects to earn $3.50 per share and has expected dividend payout ratio of...

1) weaver brothers expects to earn $3.50 per share and has expected dividend payout ratio of 60% . it's expected constant dividend growth rate is 7% and its common stock currently sells for $30 per share. new stock can be sold to public at the current price, but floatation cost of 5% would be incurred. what would be the cost of equity from new common stock?

2) Sorensen systems inc, is expected to pay a dividend of $2.90 at year end the dividend is expected to grow at a constant rate of 5.50% a year and the common stock currently sells for $37.50 a share. the before tax cost of debt is 7.50% and the tax rate is 40% . the target capital structure consists of 45% debt and 55% common equity. what is the company WACC if all the equity used is from retained earnings.

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jeff jeffy answered 9 months ago
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