QuestionThe following tabulation gives earnings per share figures for Powell Manufacturing during the preceding 10 years. The firmâs common stock, 140,000shares outstanding, is now selling for Rs.50 a share, and expected dividend forthe coming year (2008 – Affordable Custom Essay Writing Service | Write My Essay from Pro Writers) is 50% of EPS for the year. Investors expect past trends to continue, so âgâ may be based on the historical earnings growth rate.YearEPS (Rs)19982.0019992.1620002.3320012.5220022.7220032.9420043.1820053.432006 – Write a paper; Professional research paper writing service – Best essay writers3.7020074.00The current interest rate on new debt is 8%. The firmâs corporate tax rate is 40%. The firmâs market value capital structure, considered to be optimal, is as follows:DebtRs.3,000,000Common equity7,000,000Total CapitalRs.10,000,000Required:Calculate the firmâs after tax cost of new debt and of common equity, assuming that new equity comes only from reinvested cash flow.( calculate the cost of equity, assuming constant growth model)Find the firmâs WACC, assuming no new common stock is sold.
Travelling Experience
Can you remember your best experince in another country? Last summer (in 2007), I traveled to the United States for working and spending some time with my friends. I stayed two months in that country. I decided to travel because I wanted to do something different. I was bored about all my daily activities, so […]
