10.11/.12/.13

11. Problem 10.13 (Cost of Common Equity with Flotation) eBook 1 Problem Walk-Through Banyan Co.'s common stock currently sells for $42.75 per share. The growth rate is a constant 4%, and the company has an expected dividend yield of 5%. 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 5% would be incurred. What would be the cost of new equity? Do not round intermediate calculations. Round your answer to two decimal places. 12. Problem 10.14 (Cost of Preferred Stock including Flotation) eBook Travis Industries plans to issue perpetual preferred stock with an $11.00 dividend. The stock is currently selling for $87.00, but flotation costs will be 5% of the market price, so the net price will be $82.65 per share. What is the cost of the preferred stock, including flotation? Round your answer to two decimal places. 13. Problem 10.15 (WACC and Cost of Common Equity) eBook Kahn Inc. has a target capital structure of 50% common equity and 50% debt to fund its $9 billion in operating assets. Furthermore, Kahn Inc. has a WACC of 15%, a before-tax cost of debt of 10%, and a tax rate of 25%. The company's retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend next year (D1) is $2, and the current stock price is $34. a. What is the company's expected growth rate? Do not round intermediate calculations. Round your answer to two decimal places. % b. If the firm's net income is expected to be $1.5 billion, what portion of its net income is the firm expected to pay out as dividends? Do not round intermediate calculations. Round your answer to two decimal places. (Hint: Refer to Equation below.) Growth rate = (1 - Payout ratio)ROE % %