1 a firm is worth 1400 has a 35 tax rate total debt of 600, Ask an Expert

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1. A firm is worth $1,400, has a 35% tax rate, total debt of $600, an unlevered return of 15%, and a cost of debt of 7%. What is the cost of equity?

a. 18.41%

b. 16.67%

c. 18.90%

d. 12.07%

e. 17.93%

2. The Johnson Company just paid an annual dividend of $1.80. How much would you be willing to pay for one share of Johnson Company stock if the dividend remains constant and you require a 10% rate of return?

a. $19.38

b. $18.21

c. $14.40

d. $18.00

e. $17.78

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92857978

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