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NEW QUESTION: 1
Byron Corporation's present capital structure, which is also its target capital structure, is 40 percent debt and 60 percent common equity. Next year's net income is projected to be $21,000, and Byron's payout ratio is 30 percent. The company's earnings and dividends are growing at a constant rate of 5 percent; the last dividend was $2.00; and the current equilibrium stock price is $21.88. Byron can raise all the debt financing it needs at 14 percent. If Byron issues new common stock, a 20 percent flotation cost will be incurred. The firm's marginal tax rate is 40 percent. What is the component cost of the equity raised by selling new common stock?
A. 16.4%
B. 15.0%
C. 12.0%
D. 17.0%
E. 14.6%
Answer: D
Explanation:
Explanation/Reference:
Explanation:
k(e) (component cost of external equity) = ($2.10/$21.88(1-.20)) + 0.05 = 17%.
NEW QUESTION: 2
Which two types of traffic are carried over a vPC peer link when no failure scenarios are present? (Choose two.)
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D. unicast data traffic
Answer: A,C
Explanation:
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Answer: D
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Aalk - 2014-05-05 16:45:18
Plato - 2014-05-05 16:45:51
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Eleanore - 2014-09-28 16:36:48