Equity shares of phonex Ltd are quoted in the market at Rs17. The dividend expected a year hence is Rs1.50. The expected rate of dividend growth is 8%. The cost of equity capital to the company is

Related MCQs

• Consider the below mentioned statements: 1. A debt-equity ratio of 2:1 indicates that for every 1 unit of equity, the company can raise 2 units of debt. 2. The cost of floating a debt is greater than the cost of floating an equity issue. State True or False:
• When preference shareholders have a right to convert their preference shares in to equity shares after a pre-decided dare such shares are called -------- shares.
• In the case of existing shares cost of equity is computed under dividend yield method by dividing dividend per share with
• If the weighting of equity in total capital is 1/3, that of debt is 2/3, the return on equity is 15% that of debt is 10% and the corporate tax rate is 32%, what is the Weighted Average Cost of Capital (WACC)?
• The dividend on equity shares is only paid when dividend on ---------- has already been paid
• EVA= ___________ - (Equity capital x % of cost of equity capital
• _____________ enhance the market value of shares and therefore equity capital is not free of cost.
• Lei-Feng, Inc.'s $100 par value preferred stock just paid its $10 per share annual dividend. The preferred stock has a current market price of $96 a share. The firm's marginal tax rate (combined federal and state) is 40 percent, and the firm plans to maintain its current capital structure relationship into the future. The component cost of preferred stock to Lei-Feng, Inc. would be closest to .
• Shares of face value of 10 are 80% paid up. The company declares a dividend of 50%. Amount of dividend per share is
• A company should arrange the capital structure in such a way that there is maximum flexibility in the capital and cost of capital is