Question:
Whitewall Tire Ltd just paid a $1.60 dividend on its ordinary shares. If Whitewall is expected to increase its annual dividend by 2 per cent per year into the foreseeable future and the current price of Whitewall Tire Ltd’s ordinary shares is $11.66, what is the cost of ordinary equity for Whitewall Tire Ltd.
Kresler Autos has preference shares outstanding that pay annual dividends of $12, and the current price of the shares is $80. What is the after-tax cost of new preference shares for Kesler Autos if the flotation (issuance) costs for a new issue of preference shares are 5 per cent.13.9 Your manager just finished calculating your company’s weighted average cost of capital. He is relieved because he says that he can now use that cost of capital to evaluate all projects that the company is considering for the next 4 years. Evaluate that statement
The rise of responsible fixed-income investing investordaily.com.au - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from investordaily.com.au Daily Mail and Mail on Sunday newspapers.
Why leaders need a long-term view
In boardroom discussions, the focus should be on how strategies today can help predict behaviors tomorrow.
Photograph by RichVintage
When a business is going well, I’ve seen leadership teams conform to an unwritten 80-20 rule of thumb: They spend about 80 percent of their time focused on growth for the long term and only 20 percent managing the short term. But when things are not going well, I’ve observed the opposite: The temptation is to focus almost exclusively on the short term, with leaders spending a mere fraction of their time looking ahead.
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