An analyst has collected the following information regarding Christopher Co.: · The company's capital structure is 70 percent equity, 30 percent debt. · The yield to maturity on the company's bonds is 5 percent. · The company's year-end dividend (D1) is forecasted to be $0.8 a share. · The company expects that its dividend will grow at a constant rate of 5 percent a year. · The company's stock price is $25. · The company's tax rate is 40 percent. · The company anticipates that it will need to raise new common stock this year. Its investment bankers anticipate that the total flotation cost will equal 10 percent of the amount issued. Assume the company accounts for flotation costs by adjusting the cost of capital.     Given this information, calculate the company's cost of new equity. Round it to two decimal places.

Analysts forecast Power Puff to generate $110 million of free cash flow at the end of the current year. (Assume that cash flows occur on December 31 and today is January 1.) Analysts also expect Power Puff's cash flow to grow at 2% in perpetuity. Power Puff has no debt and its shareholders require a return of 11.5%. There are 175 million shares outstanding and the shares trade for $6.62. Power Puff has announced a stock repurchase. It intends to buy shares at a price of $7 per share. The repurchase will be debt financed. Assume that Power Puff is aiming to maintain a debt to value ratio of 40%. The cost of debt is 5.25% and the tax rate is 30%. A) What is the Value of the Levered company? (Select from A, B, C) B) What will the stock price be after the repurchase? (Select from D, E, F) Select 2 correct answer(s) A) $1321 M B) $1240 M C) $1559 M D) $7.15 E) $6.91 F) $6.62

Loran Chalices Inc. hired you as a consultant to estimate the company's WACC. You have obtained the following information. (1) The company's noncallable bonds mature in 20 years, have a coupon rate of 7.00% paid annually, a par value of $1,000, and a current market price of $875. (2) The company's tax rate is 25%. (3) The required rate of return on the company's common stock based on CAPM is 10.3%. (4) The target capital structure consists of 45% debt, with the remainder comprised of common equity. What is its WACC?

A&T, Inc. paid an annual dividend of $1.47 per share last month. The company is planning on paying $1.56, $1.68, and $1.75 per share over the next three years, respectively. After that, the dividend will be constant at $1.80 per share per year. What is the market price of this stock if the market rate of return is 12 percent? $13.98 $14.65 $13.54 $14.16 O None of these answers are correct