Question
Please show me steps thru financial calculator detailed or excel w simple math 1) Asian Trading Company paid a dividend yesterday of $5 per share.
Please show me steps thru financial calculator detailed or excel w simple math
1) Asian Trading Company paid a dividend yesterday of $5 per share. The dividend is expected to grow at a constant rate of 8% per year. The price of Asian Trading Company's stock today is $29 per share. If Asian Trading Company decides to issue new common stock, flotation costs will equal $2.50 per share. Asian Trading Company's marginal tax rate is 35%. Based on the above information, the cost of new common stock is
A) 28.38%.
B) 24.12%.
C) 26.62%.
D) 31.40%.
2) Suppose you are considering investing in a project with the following cash flows:
Initial Outlay Cash Flow in Period 1 2 3 4
$4,000,000 $1,546,170 $1,546,170 $1,546,170 $1,546,170
The Internal Rate of Return (to nearest whole percent) is '
A) 10%.
B) 18%.
C) 20%.
D) 24%.
3) Your firm is considering an investment that will cost $920000 today. The investment will produce cash flows of $450,000 in year 1, $270,000 in years 2 through 4, and $200,000 in year 5. The discount rate that your firm uses for projects of this type is 11.25%. What is the investment's net present value?
A) $540,000
B) $378,458
C) $192,369
D) $112,583
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