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Question
The expected dividend is $2.50 for a share of stock priced at $25. What is the cost of common equity if the long-term growth in dividends is projected to be 8%?A) 10%
B) 8%
C) 25%
D) 18%
Answer
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Related questions
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A new forklift under consideration by Home Warehouse requires an initial investment of $100,000 and produces annual cash flows of $50,000, $40,000, and $30,000. Which of the following will not change if the required rate of return is increased from 10% to 12%.
A) The net present value.
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C) The profitability index.
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The equivalent annual cost method is most appropriate in which of the following situations? In each case, assume that several mutually exclusive options are available.
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The size of capital investments and the difficulty in reversing them once they are made make capital-budgeting decisions very important to the firm.
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The ________ designates the date on which the stock transfer books are closed in regard to a dividend payment.
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C) date of record
D) payment date
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Five years ago, Mr. Martinez purchased 1000 shares of JPM stock at $50 per share. If Mr. Martinez ' tax rate is 25% would he prefer that the company pay a $5.00 per share dividend or offer to repurchase 100 shares at $50 per share?
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