Problem 14.01 – Calculating Cost of Equity
Fundamentals of Corporate Finance
Ross, Westerfield, and Jordan
13th Edition
Find the company’s cost of equity.
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Find the company’s cost of equity.
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Determine the stock value on the ex-dividend date for Callahan, Inc.
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Figure out the company’s cost of equity capital?
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Determine the total portfolio value on the ex-dividend date.
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Figure out the best estimate of the cost of equity.
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Determine the ex-dividend price given that the new IRS regulations require that taxes be withheld.
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Find the best estimate of the company’s cost of equity capital (Using the arithmetic average growth rate & geometric average growth rate).
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Calculate how many new shares will be distributed after a stock dividend is declared, and determine how the common stock account, the capital surplus account, the retained earnings account and the total owners’ equity would change as a result of the stock dividend.
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Find the cost of preferred stock.
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If the company declares a stock split, determine the new number of shares outstanding and the new par value per share.
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