Two considerations that cause a corporation's cost of capital to ...

[leo leo]

Two considerations that cause a corporation's cost of capital to be different than its investors'
  required returns are
 
  A) individual taxes and dividends.
  B) corporate taxes and flotation costs.
  C) corporate taxes and the earned income tax credit.
  D) individual taxes and corporate taxes.

Question 2

Due to growing demand for computer software, the Shine Company has had a very successful year and expects its earnings per share to grow by 25 percent to reach 5.50 for this year.
 
  Estimate the price of the company's common stock assuming the industry's price/earning ratio is 12.

[ngr69]

Answer to Question 1

B

Answer to Question 2

Stock price = (P/E  E) = 12  5.50 = 66

[leo leo]

Thank you

[ngr69]

No problemo