Banyan Co.’s common stock currently sells for $58.25 per share. The growth rate is a constant...

Banyan Co.’s common stock currently sells for $58.25 per share. The growth rate is a constant 8%, and the company has an expected dividend yield of 2%. The expected long-run dividend payout ratio is 20%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your answer to two decimal places.

%

Expert Solution

jeff jeffy answered 6 months ago

Banyan Co.’s common stock currently sells for $48.25 per share. The growth rate is a constant...

Banyan Co.’s common stock currently sells for $48.25 per share. The growth rate is a constant 4%, and the company has an expected dividend yield of 4%. The expected long-run dividend payout ratio is 35%, and the expected return on equity (ROE) is 7%. New stock can be sold to the public at the current price, but a flotation cost of 15% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your...

Banyan Co.’s common stock currently sells for $40.25 per share. The growth rate is a constant...

Banyan Co.’s common stock currently sells for $40.25 per share. The growth rate is a constant 4%, and the company has an expected dividend yield of 6%. The expected long-run dividend payout ratio is 50%, and the expected return on equity (ROE) is 8.0%. New stock can be sold to the public at the current price, but a flotation cost of 10% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your...

Banyan Co.’s common stock currently sells for $44.75 per share. The growth rate is a constant...

Banyan Co.’s common stock currently sells for $44.75 per share. The growth rate is a constant 8%, and the company has an expected dividend yield of 6%. The expected long-run dividend payout ratio is 20%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 10% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your...

Banyan Co.’s common stock currently sells for $41.25 per share. The growth rate is a constant...

Banyan Co.’s common stock currently sells for $41.25 per share. The growth rate is a constant 8.4%, and the company has an expected dividend yield of 4%. The expected long-run dividend payout ratio is 40%, and the expected return on equity (ROE) is 14%. New stock can be sold to the public at the current price, but a flotation cost of 15% would be incurred. What would be the cost of new equity? Round your answer to two decimal places....

Banyan Co.’s common stock currently sells for $30.25 per share. The growth rate is a constant...

Banyan Co.’s common stock currently sells for $30.25 per share. The growth rate is a constant 5%, and the company has an expected dividend yield of 4%. The expected long-run dividend payout ratio is 50%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 10% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your...

Banyan Co.’s common stock currently sells for $40.75 per share. The growth rate is a constant...

Banyan Co.’s common stock currently sells for $40.75 per share. The growth rate is a constant 6%, and the company has an expected dividend yield of 3%. The expected long-run dividend payout ratio is 40%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 15% would be incurred. What would be the cost of new equity?

Banyan Co.’s common stock currently sells for $46.25 per share. The growth rate is a constant...

Banyan Co.’s common stock currently sells for $46.25 per share. The growth rate is a constant 8%, and the company has an expected dividend yield of 5%. The expected long-run dividend payout ratio is 20%, and the expected return on equity (ROE) is 10.0%. New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your...

Banyan Co.’s common stock currently sells for $48.50 per share. The growth rate is a constant...

Banyan Co.’s common stock currently sells for $48.50 per share. The growth rate is a constant 9.6%, and the company has an expected dividend yield of 5%. The expected long-run dividend payout ratio is 40%, and the expected return on equity (ROE) is 16%. New stock can be sold to the public at the current price, but a flotation cost of 15% would be incurred. What would be the cost of new equity? Round your answer to two decimal places....

Constant Growth Valuation Woidtke Manufacturing's stock currently sells for $32 a share. The stock just paid...

Constant Growth Valuation Woidtke Manufacturing's stock currently sells for $32 a share. The stock just paid a dividend of $3.75 a share (i.e., D0 = $3.75), and the dividend is expected to grow forever at a constant rate of 8% a year. What stock price is expected 1 year from now? Round your answer to the nearest cent. $ What is the estimated required rate of return on Woidtke's stock? Do not round intermediate calculations. Round the answer to three...

Constant Growth Valuation Woidtke Manufacturing's stock currently sells for $18 a share. The stock just paid...

Constant Growth Valuation Woidtke Manufacturing's stock currently sells for $18 a share. The stock just paid a dividend of $1.00 a share (i.e., D0 = $1.00), and the dividend is expected to grow forever at a constant rate of 5% a year. What stock price is expected 1 year from now? Round your answer to the nearest cent. $ What is the estimated required rate of return on Woidtke's stock? Do not round intermediate calculations. Round the answer to three...

Question