Cost of Common Stock Equity

Related BrainMass Solutions

• Cost of equity and WACC

  Cost of new common stock = D1/(P0-F) + g = 3.18/32.40 + 6% =15.81% 10-8 Cost of common equity = D1/P0 + g D1 = 2.00 X 1.07 = 2.14 Cost of common equity = 2.14/22.50 + 7% = 16.51% WACC = Proportion of Debt X Cost of Debt x (1-T) + Proportion of

• Calculating after tax cost of capital

  10 Common equity............ 13.0 70 After tax cost of capital= after tax cost of capital*weight of debt+ after tax cost of preferred stock*weight of preferred stock+ after tax cost of common equity*weight of common equity

• Cost of capital

  Use the DCF method to find the cost of common equity. b. Now calculate the cost of common equity from retained earnings using the CAPM method. c. What is the cost of new common stock, based on CAPM?

• Weighted average cost of capital (WACC)

  220413 Weighted average cost of capital (WACC) Debt 35% preferred stock 15 common equity 50 The after-tax cost of debt is 6.5 percent; the cost of preferred stock is 10 percent; and the cost of common equity (in the form of retained earnings) is

• WACC, Beta, cost of common stock, cost of equity

  446607 WACC, Beta, cost of common stock, cost of equity Explain how a business can reduce the following: 1. WACC- Weighted average cost of capital 2. How do reduce Beta 3. How do you reduce cost of common stock 4.

• Cost of common equity explained in this solution

  Wacc= Weightage of Debt *Cost of debt+Weightage of Equity*Cost of equity =40%*7.2%+60%*16.51% =12.78%= Answer Response provides the steps to compute the cost of common equity

• CAPM, DCF, cost of preferred stock and new common stock

  a) Calculate the cost of each capital component, the cost of preferred stock, and the cost of equity with the DCF method and the CAPM method. b) Calculate the cost of new common stock, based on the CAPM.

• Debt ratio/common cost equity

  155715 Debt ratio/Common Cost Equity Equity Multiplier of 3.71. Assets are financed with combined common equity and long term debt. Debt ratio? Stock sells at 71 per share. Just paid dividends of 2.12.

• Profitability Measurements for Walmart, Target, & Costco

  Return on Investment is the gain on an investment minus the cost of investment, divided by the cost of investment. Return on Equity relates to common stock.

• Cost of Equity - new common stock

  309151 What would be the cost of equity from new common stock?