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-   -   How to calculate annual interest rate (https://www.askmehelpdesk.com/showthread.php?t=346171)

  • Apr 26, 2009, 06:01 AM
    lilsugar20711
    How to calculate annual interest rate
    Assume that a college education will cost $280,000 when your child enters college in 18 years. You currently have $39,000 saved. What annual rate of interest must you earn to cover the cost of the education?
  • Apr 26, 2009, 06:02 AM
    lilsugar20711
    How do I calculate cost of equity?
    Calculating Cost of Equity. The Troxel Co. just issued a dividend of $2.30 per
    Share on its common stock. The company is expected to maintain a constant
    6 percent growth rate in its dividends indefinitely. If the stock sells for $42 a share,
    What is the company’s cost of equity?
  • Apr 26, 2009, 06:03 AM
    lilsugar20711
    How do I calculate percentage total return?
    Calculating Returns. Suppose a stock had an initial price of $83 per share, paid a
    Dividend of $1.40 per share during the year, and had an ending share price of $91.
    Compute the percentage total return.
  • Apr 26, 2009, 06:23 AM
    ScottGem

    Please review the guidelines on asking for help with homework that can be found here:



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  • Apr 26, 2009, 06:26 AM
    ek2812
    Cost of equity= share price ($2.30) / market price value ($42) + growth (6%)

    2.3/42 + .06 = 11.47

    now that we've got that sorted.. how did you find that information in order to work out equity and debt? Because I need to work out a wacc for a company in the London stock exchange but I can't seem to find the same information. Where did you look to get all that info on the company above?
  • Apr 26, 2009, 05:04 PM
    denzil87

    For your cost of equity I would adopt the rearranged growth model so ke = do(1+g)/MPS + G

    That gives you 12(1+0.07)/(254-12) +0.07 = 12.14$

    Note it is 254-12 and not 254 because 254 is div. and we need ex div.
  • Apr 28, 2009, 01:04 AM
    morgaine300

    ek2812 & denzil87, you too need to read the guidelines that ScottGem posted. This goes for answering people's homework also.

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