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Can anyone help me with these finance homework questions over the cost of retained earnings???? 4. 111e cost of retained earnings M he a If

Can anyone help me with these finance homework questions over the cost of retained earnings????

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4. 111e cost of retained earnings M he a If a firm cannot invest retained earnings to earn a rate of return the required rate of return on retained earnings, it should return those funds to its stockholders. The cost of equity using the CAPH approach The current risk-free rate of return {rRFjl is 4.23%.. while the market risk premium is 535%. the Monroe Company has a beta of 0.?8. Using the Capital Asset Pricing Model {CAPM} approach, Monroe's oost of equity is The cost of equity using the bend yield plus risk premium approach The Jackson Company is closely held and. therefore. cannot generate reliable inputs with which to use the CAPM method for estimating a oompany's cost of internal equity. Jackson's bonds yield l.25%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 5.55%. Based on the bond-yield-p|us-risk-premium approach, Jackson's oost of internal equity is: D 13.29% D 13.14% 0 15.21% 0 13.33% The cost of equity using the discounted cashflow {or dividend growth} approach Grant Enterpn'ses's stock is currently selling for $32.45 per share. and the firm expects its per-share dividend to be $2.35 in one year. Analysts project the firm's growth rate to be constant at 5.22%. Using the cost of equity using the discounted cashfiow {or diyidend growth) app roach, what is Grant's cost of internal equity? 1?.5% 13.61% 12.96% 12.31% DUDE] Estimating growth rates It is often difficult to estimate the expected future dividend growth rate for use in estimating the cost of existing equity using the DCF or DG approach. In general, there are three available methods to generate such an estimate: - Carry forward a historical realized growth rate. and apply it to the future. - Locate and apply an expected future growth rate prepared and published by security analysts. - Use the retention growth model. Suppose Grant is currently distributing 55.i]CI of its earnings in the form of cash dividends. It has also historically generated an average return on equity {ROE} of lil. Grant's estimated growth rate is

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