Discussion Question
After watching the videos and reading the articles assigned for this week think about what inspiration you can draw from the stories and images provided. Was there a particular idea that inspired you and that you would like to try out one day? What elements might you need to consider when creating an environment to support engagement and sense of belonging that values all children, families, and educators? What messages about the educational values of the setting do you wish your environment to convey to the public?

Week 8: Creating Environments

Don't use plagiarized sources. Get Your Custom Essay on
Just from $13/Page
Order Essay


Note:During this week, try the following exercise-

If you are not a practicing educator in an early childhood setting, during this week try to step back and observe the indoor environment with objective, fresh eyes. If you are not currently practicing, think about an early learning space you are familiar with. Focus your attention to the way the furniture – table, chairs, cupboards – are set up, the kinds of materials that are available and how is it presented, what is displayed on the walls, what is the floor made of, are there floor and window coverings?. Sit on one of the small chairs and try to view the space from a child’s point of view. How does this change your impression of the environment?
Now – repeat this exercise in the outdoor space. What materials are present? How are the spaced? Are they accessible for all? Is there an element of nature present? Is there connectivity between the indoor space and the outdoor space?
The early childhood environment is both the context for learning and a participant in learning. It is a place for active, creative, investigative search for knowledge, understanding, and meaning. The environment is not static it acts back and responds to children’s actions. Children form significant relationships with their environment, which includes people, materials, visuals, symbols, furniture, colors, texture, windows, light, and cultural tools such as language. Environments have direct relationships withchildren’s learning, as well as with their cognitive, social, emotional, aesthetic, and physical development.
In ECE theory and practice the environment is given greatsignificance. Throughout the history of ECE pioneer in the field have givenrecognition to the role of the environment in the education ofyoung children. For instance, Froebel invented educational toys and activities, Montessori designed child-size furniture, and in Reggio Emilia teachers describe the environment as a “third teacher.” By this they mean that the environment goes far beyond providing a safe and stimulating setting for children’s learning; the environment in Reggio Emilia schools reflects the values and identity of the school and its community.

Creating the environment

Most educational settings for young children in North America have organized the physical space around basic principles and ideas. For example, most preschool and kindergarten spaces are arranged in a way that allows children to choose their activities by placing materials and toys on low accessible shelves. Another principle that supports choice is that the classroom is often divided into different learning centres. The division is done by arranging tables, chairs, carpets, and cupboards (or shelving units) in a way that creates a natural boundary between spaces. Typically, a large floor space is designated for large group activities, such as the morning circle, story reading, and other full class activities.The learning centres that are most commonly found in an early childhood classroom are:
Art centre(includes: an easel, a long table, chairs, and art materials – paints, water colors, clay, pencils, brushes, glue, assorted paper, scissors),
Discovery or Science centre(includes: water and or sand table, classroom pets, natural materials, magnifying glasses, mirrors, scales, variety of measurement tools and equipment),
Dramatic play area(includes: child-sized furniture, dress-up clothes, dolls and accessories, cooking utensils, hats, mirrors, music and dance props),
Blocks and manipulative area(includes: many size blocks, models of peoples and animals, puzzles, stringing beads, vehicles, board games),
Language centre(includes: books, dictionaries, writing materials, flannel board, language games, tape recorder),
Outdoor space(includes: large building toys, balls, sand and water toys, workbench, climbing equipment).

Contemporary thought in ECE has challenged early childhood educators to go beyond the traditional thinking about learning centres as described above. Rather than creating teacher-based (often with adult’s goal in mind) learningcentres,educators are challenged to think how centresinthe classroom can become a response to children’s inquiry and curiosity. In an article that you are asked to read this week, Pat Tarr challenges educators to rethink the use of children’s art display on the classroom walls. Tarr asks educators to think beyond the idea of ‘decorating’ the walls to using the walls as a place to express educational concepts and values.
In this module, through a series of videos (see below) and the weekly assigned readings, we will consider the early learning environment through the pedagogical principles ofwelcoming, creating invitations for learning,collaboration, communication, and beauty.
Visit the follwoing web resource

Think, feel, act: lessons from research about young children | Ontario.ca
Links to an external site.
and watch the short videos titled:


Supporting curiosity and investigation
Links to an external site.


Taking risks, building competence
Links to an external site.


Rethinking the space
Links to an external site.


Rethinking time
Links to an external site.

Welcoming Environments that creating a sense of belonging

How can educators create and maintain an environment that sends a welcoming message to children and their families; one that gives a sense of community and tells children “You belong here.” Does the environment express a sensecare? Does it give value to children’s expressions and creations? Is the environment inclusive? Do children have a personal space with their photo and/or name on it? (i.e. a cubby, a special box, an individual binder). Is children’s work displayed on the walls respectfully? Is there documentation of the life in the classroom on the walls? (i.e. images and a narrative that describes the process of the learning). How are families represented in the classroom? (i.e. apanel with a family story from each child). How does this environment reflect the unique group of children, their families, and their community? What is the identity of this particular class that is different from all other groups who used the same space but gave it a different meaning?

Environments that support creativity and inquiry:

Invitations for learning

Does the environment send a message that creativity and inquiry are welcomed and expected? Does the environment allow for choice and accessibility to a variety of materials and learning tools? (i.e. materials are displayed on low shelves, educators add and renew materials periodically to invoke exploration and inquiry). Do materials provoke curiosity, awaken imagination, and trigger thinking? (i.e. a variety of open-ended materials that invite different ways of responding such as constructing, taking apart, moulding, sculpting). Are there tools available for children to represent their knowledge and understanding? (i.e. pens, pencils, paint, paper, markers, clay, scissors, glue, notebooks). Is inquiry supported? Are there spaces for active exploration and investigation of materials and ideas? Is there a wide collection of information and fiction books? Are there opportunities to ask questions and to pursue different ways of answering them?

Environments that sustain

communication, participation, collaboration, and relationships

Do children have opportunities to discuss and communicate in large and small groups? Do children participate in making decisions about their space? How? Are interactions and conversations encouraged? Is collaborative play fostered? Is the teacher available for conversations with children and parents?Are there quiet spaces where children can work independently? What messages does the environment give about the school?

Environments that embrace and inspire beauty

Maria Montessori believed that children’s environments should aspire to be aesthetically appealing. She designed beautiful materials and furniture for her children’s centre. Montessori and others maintained that by creating these beautiful and amiable environments for children we express that we value children and childhood. Beautiful environments can be created in many ways. For example, by letting nature in through natural light, arrangement of flowers and plants, and availability of natural materials (i.e. rocks, pine cones, shells, twigs, leaves, etc.). In beautiful environments special attention is given to art materials and to the display of children’s art.


Friedman, S. (2005). Environments that inspire.
YC Young Children, 60(3), 48-55.(Library Course Reserves) Please find attached pdf

Tarr, P. (2004). Consider the walls.
YC Young Children, 59(3), 88-92.(Library Course Reserves) Please find attached pdf

Wien, C., Coates, A., Keating, B., & Bigelow, B. (2005). Designing the environment to build connection to place.
YC Young Children, 60(3), 16-24. (Library Course Reserves) Please find attached pdf

Discussion Question

After watching the videos and reading the articles assigned for this week think about what inspiration you can draw from the stories and images provided. Was there a particular idea that inspired you and that you would like to try out one day? What elements might you need to consider when creating an environment to support engagement and sense of belonging that values all children, families, and educators?What messages about the educational values of the setting do you wish your environment to convey to the public? Consider the Walls

Author(s): Patricia Tarr

Source: YC Young Children , May 2004, Vol. 59, No. 3 (May 2004), pp. 88-92

Published by: National Association for the Education of Young Children (NAEYC)

Stable URL: https://www.jstor.org/stable/42729109

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide
range of content in a trusted digital archive. We use information technology and tools to increase productivity and
facilitate new forms of scholarship. For more information about JSTOR, please contact [emailprotected]

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at

Terms and Conditions of Use

National Association for the Education of Young Children (NAEYC) is collaborating with JSTOR
to digitize, preserve and extend access to YC Young Children

This content downloaded from on Fri, 28 Oct 2022 00:54:36 UTC

All use subject to https://about.jstor.org/terms


Jm s a university professor in a teacher preparation
program, I regularly visit kindergarten and primary
classrooms to observe student teachers. One spring
day, as I observed a student teach a science lesson to
a group of 25 first-graders, my gaze wandered around
the room.

From a small chair in a corner, I counted 19 different,
decorated, scalloped borders segmenting portions of
the bulletin boards lining the walls. The boards were
filled with words: a word wall, class rules, calendar,
alphabets, numbers, shapes, and colors, and a plethora
of cartoon people and animals, each with a message
and at least 50 of them with horseshoe-shaped smiles
rather like a capital U. Blue-and-white snowflake bor-
ders hemmed in a group of winter paintings – white
paint on blue paper – adding to the visual busyness.
St. Patrick’s Day mobiles created from brightly painted
rainbows and black-line masters hung from the ceiling
just above the children’s heads. Rainbows, leprechauns,
and pots of gold jiggled before my eyes. Almost mute
amid the visual din were children’s drawings and
written work on the walls.

I wondered what it would be like to be a child in that

classroom day after day. Would I refer to the texts on
the walls? Would I daydream or tune out to escape the
cacophony of imagery? As an adult, I wondered about
the messages embedded in the extensive use of smiling
cartoon figures and stereotyped designs. 1 wondered

Patricia Tarr, PhD, is associate professor in the Faculty of
Education at the University of Calgary, Canada. As an art and
early childhood educator she has been interested in the Reggio
Emilia approach since the early 1990s.

Photos courtesy of the author except as noted.

how long the images had been on the walls. At what
point would the texts and images fade from conscious-
ness? 1 pondered the impact of this visual environment
on children who have difficulty concentrating and
staying focused on their work.

This classroom is not unique. Commercially produced
borders, posters, and informational materials have
become part of an accepted visual culture of North
American early childhood classrooms. It is assumed
that scalloped borders (which even line some of the
bulletin boards in the faculty of education where I
teach), commercial alphabets, and posters for shapes,
numbers, and colors are essential components of a
kindergarten or primary classroom.

Teachers who take a different approach may even feel
pressure from other teachers or parents to decorate so
that their room looks like a classroom should look. One

teacher who begins her year with very little on the
walls told me that her principal had tactfully inquired
about her classroom walls. She assured the principal
that the walls were deliberately bare, awaiting the rich
work the children would soon be creating.

As 1 began to think in more depth about classroom
walls and to explore some of the literature on environ-
ments, I found little that directly relates to wall space
other than how-to-books on creating attractive bulletin
boards. The Accreditation Criteria and Procedures of the

National Association for the Education of Young Children
states, “The environment should be attractive, colorful,
and have children’s work and other pictures displayed
at children’s eye level” (NAEYC 1998, 49). While these
standards are designed for preschool and kindergarten
rooms, not primary classrooms, in my experience, kin-
dergarten programs typically contain the same commer-

88 Young Children May 2004

This content downloaded from on Fri, 28 Oct 2022 00:54:36 UTC

All use subject to https://about.jstor.org/terms

ciai materials as this primary classroom. The Early
Childhood Environment Rating Scale gives positive rat-
ings to classrooms in which “most of the display is work
done by the children” and is relevant to their current
experiences (Harms, Clifford, & Cryer 1998, 14). Highest
rated on the scale are displays that feature work in
which children select the media or the subject and cre-
ate a personal response rather than a formula response.

At face value, the classroom in my example was
colorful and did have current children’s work displayed
at a child’s eye level. The room might have been rated
satisfactorily according to these standards. What seems
to be missing from these criteria are guidelines that
help teachers consider the purpose of displays, evalu-
ate commercial materials, or think about classroom

The Reggio Emilia approach stresses the “environ-
ment as the third teacher” (Gandini 1998, 177). Reggio-
inspired teachers are beginning to look more critically
at their classrooms and reconsider all aspects of
teaching environments, including the purposes of
display and classroom aesthetics. For example, follow-
ing her visit to Reggio Emilia, Hertzog wrote, “I can
strive for more aesthetically pleasing environments in
our classrooms. 1 can ask teachers to examine their

classrooms for clutter” (2001, 7).
This article critically examines classroom walls from

four perspectives: reading the environment, walls that
silence, the purpose of display, and aesthetics. I offer
some suggestions for teachers to consider when
purchasing materials and in planning how to use
classroom walls to enhance the educational setting.

Reading the environment

Classroom environments are

public statements about the educa-
tional values of the institution and

the teacher. Arrangement of space –
including desks, tables, materials
available, and what is displayed on
the walls- conveys messages about
the relationship between teaching
and learning, the image of the child
held by the teacher, and the expec-
tations for behavior and learning
within that setting (Simco 1996; Gandini 1998; Rinaldi
1998). More specifically, there is the question of the
value of commercially produced materials on classroom
walls and whether educators understand the messages
they convey (Shapiro & Kirby 1998).

The message I read in the classroom described above
was that there was a great deal of information to be
consumed by children through a transmission model of

learning. It was clear that children were expected to
know specific kinds of information – numbers, colors,
shapes, and so on – that may or may not have had any
relationship to what this particular group of children
actually knew or was relevant to them at this time. The
displays read as a standardized – and unquestioned –
assortment of materials that ought to be in the room. I
also suspect that the majority of these first-graders had
learned much of this long before they had entered this
classroom; it is precisely the kind of lessons that many
two-, three-, and four-year-olds learn in their homes or

The atmosphere created by so many cartoon figures
with smiling faces spoke to me about the intended
atmosphere for learning. I assumed that the intent was
to create a fun atmosphere – a cheery, colorful environ-
ment, where children’s attention would be captured by
these smiling figures and their messages. However,
what I saw were cute and trivialized images of children
and childhood. The stereotyped images suggested a
dumbing down of the environment based on adults’
conceptions of what children like.

Where such imagery is part of the educational
environment, children learn to value and accept stereo-
typed images as part of classroom culture (Rosario &
Collazo 1981), even though the displays may not be part
of the explicit curriculum. These images serve to
perpetuate a distinctive cultural aesthetic of school –
think of designs of school buses, apples, little school-
houses, and so forth (Tarr 2001). Such images do not
honor children’s potential to respond to the world’s
rich and diverse heritage of art forms (Feeney &

Moravcik 1987; Tarr 2001).
Neither do didactic commercial products

necessarily reflect children’s real interests;
they often do not invite engagement, won-
der, or imagination, making them that much
easier to be ignored at the conscious level.
The image of the learner embedded in these
materials is that of a consumer of informa-

tion who needs to be entertained, rather
than a child who is curious and capable of
creating and contributing to the culture
within this environment (Dahlberg, Moss, &
Pence 1999; Rinaldi 2001; Tarr 2003).

Walls that silence

In that first grade classroom, I was struck by how the
displays of children’s work were lost amongst the many
visual images on the wall. The snowflake designs on the
borders surrounding the winter paintings made it
difficult to appreciate the quality of the individual chil-
dren’s responses to painting a winter scene. Likewise,

Classroom environ-

ments are public
statements about

the educational

values of the institu-

tion and the teacher.

Young Children May 2004 89

This content downloaded from on Fri, 28 Oct 2022 00:54:36 UTC

All use subject to https://about.jstor.org/terms

the scalloped borders and cartoon figures overpowered
the penciled texts; rather than honoring children’s
words, they rendered them invisible.

Work that follows formulaic schmas, such as pre-
scriptive worksheets or the St. Patrick’s Day mobiles
hanging from the ceiling, stifles the true capabilities of
young children and consequently silences imagination
and creativity. So too does the mass of commercial ste-
reotyped images silence
the actual lived experi-
ences of those individu-

als learning together.
An overload of commer-

cial materials leaves

little room for work

created by the chil-
dren – another kind of

silencing. Finally, chil-
dren are muffled when

what is displayed does
not accurately reflect
who they are in terms
of gender, culture, and
ethnicity but rather in
stereotyped ways.

Purpose of display

The challenge for
early childhood educa-
tors is to think beyond
decorating to consider
how walls can be used

effectively as part of an
educational environ-

ment. In Reggio Emilia
the walls display
documentation panels
of projects that children
are engaged in. These
become the basis of

ongoing research and
dialogue between the
children, teachers, and
families. Panels of

photos, artifacts, and
text make “learning
visible” to participants
and to outsiders

(Rinaldi 2001).
Documentation dif-

fers from display in that
it includes explanatory
text and children’s own

words, helping the viewer understand children’s think-
ing and their processes rather than just end products.
Documentation is ongoing and part of planning and
assessment. It encourages children to revisit an experi-
ence and to share a memory together. It can provide
opportunities for further exploration or new directions
(Gandini 1998).

Here are some questions teachers can ask themselves:

What is the pur-
pose of the materi-
als I am putting on
display? Who is the
display for? The
children? Families?

Other visitors?

What image of a
learner is conveyed
by the materials

Does the display
honor children’s

work or has the
work become sim-

ply decorative by
being cut up into
shapes contrived
by an adult?

How can the
walls reflect the

lives, families,
cultures, and
interests of the
learners within?

Do the posters
invite participation
and active involve-

ment or passive
reception of infor-
mation (Shapiro &
Kirby 1998)?

What is the atmo-

sphere of the class-
room? How do the

materials on dis-

play contribute to
this atmosphere?

What are the

assumptions about
how children learn,
and how are these

reflected by the
classroom walls?

90 Young Children May 2004

This content downloaded from on Fri, 28 Oct 2022 00:54:36 UTC

All use subject to https://about.jstor.org/terms

Kindergarten and primary teachers are under in-
creased pressure to support literacy development. Lit-
erature in this area suggests that teachers create class-
rooms that are rich in print, incorporating such things as
word walls (Houle & Krogness 2001),
signs, labels, bulletin boards, and
more. However, Neuman, Coppie, and
Bredekamp caution that “More does
not mean better. In a room cluttered

with labels, signs, and such – print for
print’s sake – letters and words become
just so much wallpaper” (2000, 38).

If a word wall, alphabet, or other
material is intended as a reference, is it
located where children can actually use
it? Perhaps alphabet strips for desk use
are more helpful to children than
alphabets hung high above their heads
(Neuman, Coppie, & Bredekamp 2000).
If this applies to alphabets, could it also apply to other
didactic materials, such as number charts? Could the
wall space be used to better educational advantage?

Another question that should be asked: “Is the
information on posters and charts accurate?” Tracey
(1994) argues, for example, that children should use
mathematically correct terminology from the beginning,
replacing words such as diamond and oval with the
terms rhombus and ellipse (although oval and diamond
may be the common terms used on
posters marketed for young chil-
dren). Similarly, there are many
variations of tints and shades of

color – is a chart illustrating
primary and secondary colors too
simplistic a description?

Do children have any input into
the design of displays? British
educator Penny Hegarty (1996)
links children’s involvement in

creating classroom displays with
curriculum goals in the area of
visual literacy and visual communi-
cation. Not only might children be
involved with selecting work that
goes on display, they also can be
part of the process of creating the

Finally, are commercial materials
a wise investment? Teachers fre-

quently spend their own money on
materials to decorate their class-

rooms. Rethinking what is put on
the walls may help teachers make
thoughtful choices and save money.


Feeney and Moravcik (1987), concerned about the
aesthetics of classrooms, suggest that one of the ways

that educators could enhance the

aesthetic education of young children is
through the design of the environment.
This idea has been taken up more
recently in literature from Reggio Emilia,
particularly in Children , Spaces , Rela-
tions: Metaproject for an Environment for
Young Children (Ceppi & Zini 1998), that
looks closely at educational environ-
ments that support children’s learning
through conscious use of design
elements of light, color, texture, sound,
and smell. Curtis and Carter (2003)
spotlight North American classrooms
that have consciously used these

design elements to engage children’s curiosity and
wonder. Their Designs for Living and Learning: Trans-
forming Early Childhood Environments is an excellent
reference for any teacher wishing to reconsider class-
room aesthetics.

While much of the early childhood literature suggests
that rooms for young children be colorful, color is too
often used for its own sake rather than deliberately
chosen to enhance a particular area or to create a sense
of unity throughout the room. Walls painted in neutral

Not only might
children be involved

with selecting work

that goes on display,

they also can be part

of the process of

creating the display.

Young Children May 2004 91

This content downloaded from on Fri, 28 Oct 2022 00:54:36 UTC

All use subject to https://about.jstor.org/terms

< 00 '53 i 0 E .SS 1 k, 0) 00 'S % I .5 1 colors create a sense of calmness and allow other features in the room to stand out. Observe how color is used in homes, commercial buildings, public spaces, and museums. Consider what makes a particular place attractive and interesting. Notice how color is used to create a supportive environ- ment for objects and images on display. Children's work usually shows to best advantage on neutral walls or against backgrounds that do not compete with the work. Brightly colored borders or picture frames often detract from children's work. In the first grade classroom observed, there was no empty space to allow the eyes to rest. The feeling was of visual chaos and clutter. A balance was needed between filled and empty spaces. The winter paintings would have been much more visible and enjoyable had they been displayed without the snowflake borders and cartoon figures. Some empty space between each piece would have allowed viewers to see each work as a single entity as well as part of a larger group project. A cleaner palette also would have freed space for some text that described the winter project and included children's voices about their experience. Conclusion I am not suggesting that teachers should never purchase commercial materials. Many art repro- ductions and visuals are of educational value and appropriate to hang in a classroom. I am, however, encouraging teachers to step back and critically examine the quality and quantity of commercial materials on their walls to determine whether they actually contrib- ute to children's learning or whether they ultimately silence children. We should respect children as active, curious learners with ideas to communicate. References Ceppi, G., & M. Zini, eds. 1998. Children, spaces, relations: Meta- project for an environment for young children. Reggio Emilia, Italy: Reggio Children. Curtis, D., & M. Carter. 2003. Designs for living and learning: Trans- forming early childhood environments. St. Paul, MN: Redleaf. Available from NAEYC. Dahlberg, G., P. Moss, & A. Pence. 1999. Beyond quality in early childhood education and care: Postmodern perspectives. Philadel- phia: Falmer Press, Taylor & Francis. Feeney, S., & E. Moravcik. 1987. A thing of beauty: Aesthetic devel- opment in young children. Young Children 42 (6): 7-15. Gandini, L. 1998. Educational and caring spaces. In The hundred languages of children. The Reggio Emilia approach - Advanced reflections, 2nd ed., eds. C. Edwards, L. Gandini & G. Forman, 161-78. Greenwich, CT: Ablex. Harms, T., R. Clifford, & D. Cryer. 1998. Early childhood environment rating scale. Rev. ed. New York: Teachers College Press. Hegarty, P. 1996. A child's eye-view: The devel- opment of children's perceptual skills through display. In Display in the classroom , eds. H. Cooper, P. Hegarty, P. Hegarty, & N. Simco, 78- 93. London: David Fulton. Hertzog, IN. 2UU1. Reflections and impressions from Reggio Emilia: "It's not about art!" Early Childhood Research and Practice 3 (1). Online: http://ecrp.uiuc.edu/v3n 1/hertzog.html. Houle, A., & A. Krogness. 2001. The wonders of word walls. Young Children 56 (5): 92-93. NAEYC. 1998. Accreditation criteria and procedures of the National As- sociation for the Education of Young Children. Washington, DC: Author. Neuman, S., C. Coppie, & S. Bredekamp. 2000. Learning to read and write: Developmentally appropriate practices for young children. Washington, DC: NAEYC. Rinaldi, C. 1998. The space of childhood. In Children, spaces, relations: Metaproject for an environment for young children, eds. C. Ceppi & M. Zini, 114-20. Reggio Emilia, Italy: Reggio Children. Rinaldi, C. 2001. Documentation and assessment: What is the relationship? In Making learning visible : Children as individual and group learners, eds. Project Zero & Reggio Children, 78-89. Reggio Emilia, Italy: Reggio Children. Rosario, J., & E. Collazo. 1981. Aes- thetic codes in context: An explo- ration in two preschool class- rooms. Journal of Aesthetic Education 15 (1): 71-82. Shapiro, B., & D. Kirby. 1998. An approach to consider the semiotic messages of school science learn- ing culture. Journal of Science Teacher Education 9 (3): 221-40. Simco, N. 1996. Whose work is it anyway? Display in a negotiated classroom. In Display in the class- room: Principles, practice and learning theory , eds. H. Cooper, P. Hegarty, P. Hegarty, & N. Simco, 78-93. London: David Fulton. Tarr, P. 2001. Aesthetics codes in early childhood classrooms: What art educators can learn from Reggio Emilia. Art Education 54 (3): 33-39. Online: www.designshare.com/Research/Tarr/ Aesthetic_Codes_l .htm. Tarr, P. 2003. Reflections on the image of the child: Reproducer or creator of culture. Art Education 56 (4): 6-11. Tracey, D. 1994. Using mathematical language to enhance math- ematical conceptualization. Childhood Education 7 (4): 221-24. Copyright 2004 by the National Association for the Education of Young Children. See Permissions and Reprints online at www.naeyc.org/resources/journal. color create a supportive environment 92 Young Children May 2004 This content downloaded from on Fri, 28 Oct 2022 00:54:36 UTC All use subject to https://about.jstor.org/terms Contents p. 88 p. 89 p. 90 p. 91 p. 92 Issue Table of Contents YC Young Children, Vol. 59, No. 3 (May 2004) pp. 1-96 Front Matter FROM OUR PRESIDENT: Leadership and Change [pp. 6-6] READERS WRITE [pp. 8-8] E-LEARNING FOR EDUCATORS [Introduction and Resources] [pp. 10-11, 44] Leave N SHOW MORE... Problem set 9 Pickerington Communications Inc. (PCI) has developed a powerful server that would be used for the companys internet activities. The company has the following capital structure, which is considered optimal. Debt is 30%, preferred stock is 10%, and common stock is 60%. PCIs tax rate is 25%, and investors expect earnings and dividends to grow at a constant rate of 6% in the future. The company paid a dividend of $3.70 per share last year (D0), and its stock currently sells at a price of $60 per share. Ten-year Treasury bonds yield 6%, the market risk premium is 5%, and PCIs beta is 1.3. The following information is available for managerial finance analysis: Preferred stock: New preferred stock could be sold to the public at a price of $100 per share, with a dividend of $9. Flotation costs per share is $5. Debt: The companys long-term debt has a yield to maturity of 9% i.e., the before-tax cost of debt is 9%. Common stock: All common stock will be raised internally by reinvesting earnings. Identify the major capital structure components for Pickerington Communications and give their respective weights. Calculate the companys after-tax cost of debt. Calculate the cost of preferred stock. Calculate the companys cost of common stock using both CAPM method and the dividend growth method. What is the companys weighted average cost of capital (WACC)? The company believes that it can issue long-term corporate bonds next year that will have a yield to maturity of 13% and a coupon rate of 10%. However, the company is not sure about the tax rate for next year. Calculate the after-tax cost of debt under each of the following conditions: i. the tax rate remains at 25% ii. the tax rate reduces to 20% iii. the tax rate increases to 35% The companys management is meeting today to discuss ways to minimize its cost of capital. 7. Identify three factors that the management of PCI cannot control and three factors that it can use to control its cost of capital. Submit your answers in a Word document.


Leave a Reply

Your email address will not be published.

Related Post

Open chat
💬 Need help?
Hello 👋
Can we help you?