1. A company has 4,000 in debt and 9,000 in equity. They had net income of $1,000 and paid $600 in dividends. What is their sustainable growth rate?
a) 4.44% b) 5.71% c) 6.47% d) 7.83%
2. A company has 4,000 in debt and 9,000 in equity. They had net income of $1,000 and paid $600 in dividends. How much can their retained earnings breakpoint?
a) $578 b) $729 c) $963 d) $1,384
3. A company has just paid a dividend of $3 and is expected to grow 3% per year. If the stock price is $60 and flotation costs are 10% for issuing stock, what is the cost of new equity?
a) 8.72% b) 9.31% c) 12.46% d) 15.71%