Jarett & Sons’s common stock currently trades at $30.00 a sh…

Jarett & Sons’s common stock currently trades at $30.00 a share. It is expected to pay an annual dividend of $2.00 a share at the end of the year, and the constant growth rate is 5% a year. If the company issued new stock, it would incur a 3% flotation cost. What would be the cost of equity from new stock?

The prevailing cost of capital is 20% (WACC). You are consid…

The prevailing cost of capital is 20% (WACC). You are considering two mutually exclusive projects, A and B. Which one should you take? Project A has the following cash flows: CF0=-$1010, CF1=$480, CF2=$1050. Project B has the following cash flows: CF0=$-1000, CF1=$500, CF2=$1000.  

The market consensus is that Analog Electronic Corporation h…

The market consensus is that Analog Electronic Corporation has an ROE = 7%, a beta of 1.13, and plans to maintain indefinitely its traditional plowback ratio of 3/4. Last year’s earnings were $5 per share. The annual dividend was just paid. The consensus estimate of the coming year’s market return is 14%, and T-bills currently offer a 6% return.