$ 1.48 million
$ 3.74 million
Chelsea Fashions is expected to pay an annual dividend of $ 1.10 a share next year . The market price of the stock is $ 21.80 and the growth rate is 4.5 percent . What is the firm ’ s cost of equity ?
9.55 percent
10.54 percent
9.24 percent
7.91 percent
9.77 percent
Operating leverage is the degree of dependence a firm places on its :
Depreciation tax shield .
Variable costs .
Fixed costs .
Operating cash flows .
Sales .
Phillips Equipment has 75,000 bonds outstanding that are selling at par . Bonds with similar characteristics are yielding 7.5 percent . The company also has 750,000 shares of 6 percent preferred stock and 2.5 million shares of common stock outstanding . The preferred stock sells for $ 64 a share . The common stock has a beta of 1.21 and sells for $ 44 a share . The