Question
1. Cold Goose Metal Works Inc. is considering a one-year project that requires an initial investment of $500,000; however, in raising this capital, Cold Goose
1. Cold Goose Metal Works Inc. is considering a one-year project that requires an initial investment of $500,000; however, in raising this capital, Cold Goose will incur an additional flotation cost of 6%. At the end of the year, the project is expected to produce a cash inflow of $600,000. The rate of return that Cold Goose expects to earn on the project after its flotation costs are taken into account is a A. 13.21% B. 10.57% C.9.25% D. 8.59%?
2. Cold Goose has a current stock price of $22.35 and is expected to pay a dividend of $2.03 at the end of next year. The companys growth rate is expected to remain constant at 8%. If the issue's flotation costs are expected to equal 6% of the funds raised, the flotation-cost-adjusted cost of the firm's new common stock is A. 17.10% B.14.13% C.15.01% D.17.66%?
3. Cold Gooses addition to earnings for this year is expected to be $420,000. Its target capital structure consists of 50% debt, 5% preferred stock, and 45% common stock. Cold Goose Metal Works Inc.s retained earnings breakpoint is A.1,073,333 B.933,333 C.980,000 D.886,666?
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