Global Advertising Company the Global Advertising Company Had Net Income After Interest but After

question 75

Multiple Choice

Global Advertising Company
The Global Advertising Company had net income after interest but before taxes of $40,000 this year. The marginal tax rate is 40 percent, and the dividend payout ratio is 30 percent. The company can raise debt at a 12 percent interest rate for any amount of debt less than $8,000. If the firm raises $8,000 or more of debt, a 15 percent interest rate will apply to that new debt. The last dividend paid by Global was $0.90. Global's common stock is selling for $8.59 per share, and its expected growth rate in earnings and dividends is 5 percent. If Global issues new common stock, the flotation cost incurred will be 10 percent. Global plans to finance all capital expenditures with 30 percent debt and 70 percent equity.
-Refer to Global Advertising Company.What is Global's cost of retained earnings?

• A) 12.22%
• B) 17.22%
• C) 10.33%
• D) 9.66%
• E) 16.00%

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Definitions:

Sexual Double Standard

The societal norm that encourages or excuses certain sexual behaviors in one gender but condemns or restricts them in another.

Sexual Health

The avoidance of sexually transmitted infections and unwanted pregnancies and the fostering of healthy relationships.

STIs

Sexually Transmitted Infections, diseases passed from one person to another through intimate sexual contact.

Great Equalizer

A metaphorical concept or entity that is believed to level the playing field among individuals or groups, often referring to education or death.