(Solved): eBook Problem Walk-Through The future earnings, dividends, and common stock price of Callahan Techno ...
eBook Problem Walk-Through The future earnings, dividends, and common stock price of Callahan Technologies Inc, are expected to grow
5%per year. Callahan's common stock currenty selis for
$26.50per share; its last dividend was
$1.80; and it, will pay a
$1.89dividend at the end of the current year. a. Using the DCF approach, what is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
_(_())_(_())% b. If the firm's tota is 1.6 , the risk-free rate is
3%, and the average return on the market is
12%, what will be themant cost of common equity thing the CAPM approach? Round your answer to two decimal places.
_(_())_(_())% c. If the firmts bones earn a return of
10%, based on the bond-yield-plus-risk-premium acproach, what wait be fo? Use the Judomental rak premiam or ats in your calculations. Round your answer to two decimal places.
_(_())_(_())% d. If you have equal confidence in the inputs used for the three approaches, what is your estimate of Callahan's matth commontain pureltround Intermediate calculations. Round your answer to two decimal places.
_(_())_(_())%
