The earnings, dividends, and stock price of Talukdar Technologies Inc are expected to grow at 7 percent per year in the future Talukdars common stock sells for $23 per share, its last dividend was $2 00, and the company will pay a dividend of $2 14 at the end of the current year a Using the discoun...

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The earnings, dividends, and stock price of Talukdar Technologies Inc. are expected to grow at 7 percent

Question:

The earnings, dividends, and stock price of Talukdar Technologies Inc. are expected to grow at 7 percent per year in the future. Talukdar’s sells for $23 per share, its last was $2.00, and the company will pay a of $2.14 at the end of the current year.
a. Using the approach, what is its cost of retained earnings?
b. If the firm’s beta is 1.6, the risk-free rate is 9 percent, and the average return on the market is 13 percent, what is the firm’s using the CAPM approach?
c. If the firm’s bonds earn a return of 12 percent, what is rs using the bond- yield-plus-risk-premium approach?
d. Based on the results of parts (a) through (c), what would you estimate Talukdar’s cost of retained earnings to be?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Discounted Cash Flows
What is Discounted Cash Flows? Discounted Cash Flows is a valuation technique used by investors and financial experts for the purpose of interpreting the performance of an underlying assets or investment. It uses a discount rate that is most... Cost Of Equity
The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...