Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

MS Tech annual dividends for the last five (5) years: Year 2016 2017 2018 2019 2020 Dividend per share (RM) 0.044 0.052 0.084 0.084 0.098

MS Tech annual dividends for the last five (5) years: Year 2016 2017 2018 2019 2020 Dividend per share (RM) 0.044 0.052 0.084 0.084 0.098

After tax cost of debt= 8.17%

You are now required to calculate for MS Tech concerning their operations during the FYE 30 June 2020: i. Calculate the growth rate for MS Techs dividends from 2016 to 2020. Briefly explain what the number means. (3 marks) ii. Calculate MS Techs cost of equity in 2020 using the dividend growth model. Briefly explain what the number means. (3 marks) iii. Calculate the WACC for the firm in 2020, if MS Techs capital structure in 2020 consists of 83.7% common stock and 16.3% debt. Briefly explain what this number means.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Carbon Markets Or Climate Finance?

Authors: Axel Michaelowa

1st Edition

0415743435, 978-0415743433

More Books

Students also viewed these Finance questions

Question

Define the placebo effect and describe what it tells us.

Answered: 1 week ago