1. Martin Corporation's common stock is currently selling for $50 per share. The current dividend is $2.00 per share. If dividends are expected to grow at 6 percent per year and if flotation costs are 10 percent, then what is the firm's cost of retained earnings and what is its cost of new common stock?
a. 10.24%; 10.71%
b. 10.24%; 11.38%
c. 9.31%; 9.86%
d. 10.71%; 10.24%
e. 11.38%; 10.71%
2. A firm has an inventory turnover of 8.11, an inventory period of 45 days, average inventory of $650,000, a receivables period of 32 days, and average payables of $750,000. What is its cash cycle
A) 40 days
B) 34 days
C) 25 days
D) 18 days