Question
The Ethereum Imports Companys EPS in 2011 was $3.00, and in 2006 it was $1.90. The companys payout ratio is 30%, and the stock is
The Ethereum Imports Companys EPS in 2011 was $3.00, and in 2006 it was $1.90. The companys payout ratio is 30%, and the stock is currently valued at $42. Flotation costs for new equity will be 7%. Net income in 2012 is expected to be $15 million. The market-value weights of the firms debt and equity are 40% and 60%, respectively.
QUESTION
a. Based on the five-year track record, what is Demperes EPS growth rate? What will the dividend be in 2012?
b. Calculate the firms cost of retained earnings and the cost of new common equity.
c. Calculate the breakpoint associated with retained earnings.
PLEASE ANSWER USING EXCEL and if u can please attach the excel file via google drive LINK, and so I can download the file
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Auditing A Practical Approach
Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton, Valerie Warren
3rd Canadian edition
1-119-40285-5, 111940276X, 978-1119566007
