Assignment task:
Vodaphone's earnings per share in 2022 was $1.80, and in 2017 it was $1.25. The company distributes 60% of its earnings as dividends, and the stock is currently valued at $37.75. The cost to issue new equity is 12%. The expected net incorne for 2023 is $20 million. The company's investment banker believes they could sell 15-year bonds with a 6.5% coupon rate and a face value of $1,000, with a cost of 1% to issue the bonds. The proportion of debt to equity in the company's financial structure is 30% and 70%, respectively. The company's tax rate is 25%.
Using the information provided, answer the following questions:
Question 1: Can you give me the EPS growth rate of Vodaphone over the past five years and also the expected dividend for the year 2023?
Question 2: Can you provide me with the calculation for the cost of retained earnings and the cost of new common equity for the company?
Question 3: What is the point at which retained earnings become a liability instead of an asset?
Question 4: What is the cost of borrowing money for a company, taking into account taxes?
Question 5: What is the company's weighted average cost of capital when using retained earnings, and what is it when using new common equity?