Trahern Baking Co

question 69

Multiple Choice

Trahern Baking Co.common stock sells for $32.50 per share.It expects to earn $3.50 per share during the current year, its expected dividend payout ratio is 65%, and its expected constant dividend growth rate is 6.0%.New stock can be sold to the public at the current price, but a flotation cost of 5% would be incurred.What would be the cost of equity from new common stock?

• A) 12.70%
• B) 13.37%
• C) 14.04%
• D) 14.74%
• E) 15.48%

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Definitions:

Cyclohexene

A cyclic hydrocarbon with the formula C6H10, characterized by one double bond in the ring, making it an unsaturated compound.

Synthetic Steps

The individual stages or reactions in the laboratory synthesis of chemical compounds.

Major Organic Product

The predominant product formed in greater quantity in an organic reaction, as opposed to any minor products.

Pyridinium Chlorochromate

A reagent used in organic chemistry for the oxidation of primary and secondary alcohols to aldehydes and ketones, respectively.