A consumer is someone who uses goods and services not only food.
Answer:
18.84%
Explanation:
the flotation adjusted cost of new common stock = [expected dividend / (net proceeds from stock issuance)] + expected growth rate
- expected dividend = $2.03
- net proceeds from stock issuance = $22.35 x (1 - flotation costs) = $22.35 x 0.9625 = $21.5119
- expected growth rate = 9.4%
the flotation adjusted cost of new common stock = [$2.03 / $21.5119] + 9.4% = 9.44% + 9.4% = 18.84%
Answer:
interest and interest
Explanation:
they are both a percentage and the earnings of the interest that are in your bank are much lower than when you borrow money, usually 0.6 percent that you earn. Rather when you borrow depending on the loan it can go up to 20 percent interest.
Answer:
a. Cost of debt = Interest * (1 - Tax rate)
= 10%*(1 - 0.30)
= 7%
Cost of preferred stock = Dividend/ Issue price
= 5/48
= 10.42%
Cost of common stock (Cost of retained earnings) = (D1/P0) + g
= (4/33) + 0.07
= 0.12 + 0.07
= 0.19
= 19%
b. Fund Cost Weight Cost * Weight
Debt 7% 0.15 1.05%
Preferred stock 10.42% 0.10 1.042%
Retained earnings 19% 0.75 <u>14.25%</u>
WACC <u>16.342%</u>