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A stock is trading for 26, and just paid a dividend of 1.4 which is expected to grow at a fraction 0.20 per year.If Goldman

  1. A stock is trading for 26, and just paid a dividend of 1.4 which is expected to grow at a fraction 0.20 per year.If Goldman Sacs charges a fraction 0.15 as a flotation cost, what is the required rate of return on a new stock issue?
  2. What is the Net Present Value (NPV) of the following set of cash flows if the cost of capital is 0.02?

Co = -290

C01 = 260

C02 = 250

C03 = 80

  1. Consider a company subject to a corporate tax rate of 0.2.If the company has a debt ratio of 0.4, and an unleveraged beta of 0.8, what is the company's leveraged beta?

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