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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.
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 12%, a before- x cost of debt of 9%, 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 vidend next year (D) is $2, and the current stock price is $27. 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 $1.8 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 - PayoutraUo) * ROE
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 $1.8 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 - PayoutraUo) * ROE
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