Sunny Day Manufacturing Company is considering investing in a one-year project that requires an initial investment of $450,000. To do so, it will have to issue new common stock and will incur a flotation cost of 2.00%. At the end of the year, the project is expected to produce a cash inflow of $595,000. The rate of return that Sunny Day expects to earn on its project (net of its flotation costs) is________. (rounded to two decimal places).

A.) 20.74%

B.) 23.70%

C.) 29.63%

D.) 19.26%

White Lion Homebuilders has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.45 at the end of the year. The companys earnings and dividends growth rate are expected to grow at the constant rate of 5.20% into the foreseeable future. If White Lion expects to incur flotation costs of 3.750% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be__________.

A.) 14.10%

B.) 13.27%

C.) 16.59%

D.) 16.16%

Sunny Day Manufacturing Company Co.s addition to earnings for this year is expected to be $420,000. Its target capital structure consists of 40% debt, 5% preferred, and 55% equity. Determine Sunny Day Manufacturing Companys retained earnings breakpoint:

A.) $763,636

B.) $954,545

C.) $725,454

D.) $801,818