1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Ivanshal [37]
1 year ago
5

Judy's Boutique just paid an annual dividend of $2.35 on its common stock. The firm increases its dividend by 3.15 percent annua

lly. What is the company's cost of equity if the current stock price is $38.44 per share
Business
1 answer:
miss Akunina [59]1 year ago
8 0

The company's cost of equity is 9.45%

Given that

Annual dividend paid, D0 = $2.35

Dividend growth rate, g = 3.15% = 0.0315

Current stock price per share = $38.44

Now,

Current price of share = D1 ÷ (r - g) -(1)

Here,

r is the required rate of return

D1 = dividend at year 1 =  D0 × (1 + g)

= $2.35 × (1 + 0.0315)

= $2.424045

Therefore, from (1) we get

$38.44 = $2.424045 ÷ (r - 0.022)

(r - 0.0315) = 0.063060

r = 0.063060 + 0.0315

r = 0.09456

r = 0.0945 × 100% = 9.45%

Learn more about cost of equity here

brainly.com/question/14041475

#SPJ10

You might be interested in
2. How does feature-benefit selling create selling points?
Wittaler [7]

Answer:

Feature-benefit selling is the process of connecting your the things your product helps your customer do (features) to the goals it will help them achieve and the pain points it will help them eliminate.

Explanation:

7 0
2 years ago
Griffin's goat farm, inc., has sales of $680,000, costs of $342,000, depreciation expense of $86,000, interest expense of $53,00
Oksana_A [137]

Addition to Retained Earnings will be the amount will be Net Income as calculated using the above information:

Net income will be calculated as below:

Sales...........................................................$680000

Less: Cost of Sales.................................$342000

Less: Depreciation..................................$86000

Less: Interest Expense.........................$53000

Earnings Before Tax...............................$199000

Less [email protected] 23%.........................................$45770

Net Income..............................................$153230

Thus Income of $153230 will be added to Retained earnings and Cash dividend of $40000 will be reduced from therein.

8 0
3 years ago
Dyckman Dealers has an investment in Thomas Corporation bonds that Dyckman accounts for as a trading security. Thomas Corporatio
gtnhenbr [62]

Answer:

$20,000

Explanation:

The small investment in equities and bonds must be valued at market value and must not be accounted for in-accordance with the speculation of the company. So the market value here is $20,000 and must be valued at this price irrespective of the management valuation.

5 0
3 years ago
Baxter company produces children's wiffle ball sets using a three-step sequential process that includes molding, coloring, and f
Nikitich [7]
<span>when the sets are completely finished, the cost should be transferred to: </span>W<span>IP inventory-Finishing
WIP stands for work in progress, which is an account to placed all the amount of manufactured product that still not ready to be sold to the market.
Since the manufacter process is in finishing stage (coloring/packing), the appropriate account should be </span>WIP inventory-Finishing
3 0
3 years ago
An operation that closes due to an imminent health hazard can reopen only after getting approval from what agency?
Inessa05 [86]

Answer:

<u>the FDA (U.S. Food and Drug Administration)</u>

Explanation:

The Food and Drug Administration is a federal agency, which is allowed under US law to prevent an operation from going on if it determines that an imminent health hazard still exists.

However, according to the FDA food code, <em>"if immediate corrective action is taken, there is no "Imminent Health Hazard," meaning</em> the operation can get approval from the agency to reopen.

3 0
3 years ago
Other questions:
  • Luna wanted to convince the technology department at her company to adopt a new database system. some staff members supported th
    5·1 answer
  • Market anomaly refers to _______. an exogenous shock to the market that is sharp but not persistent a price or volume event that
    8·1 answer
  • How do you suppose the demographics of an aging population of "baby boomers" in the united states will affect the demand for mil
    14·1 answer
  • As part of thinking about the _____, managers track the Consumer Price Index, manufacturing and retail inventory levels, and con
    7·1 answer
  • If the cost of steel increases, then the supply of cars will shift and this shift would cause a shortage of cars to open up at t
    14·1 answer
  • You purchased a share of stock for $50. Two years later you received $2 as dividend and sold the share for $59. What was your ho
    8·1 answer
  • Distributors of cigarettes earn some monopoly profits in their local markets but see them slowly erode as substitutes enter the
    9·1 answer
  • A random sample of records of sales of homes from February 15 to April 30, 1993, from the files maintained by the Albuquerque Bo
    7·1 answer
  • Adams, Inc. has sales of $100,000 with a contribution margin of $60,000 and net income of $20,000. Baron, Inc. has sales of $110
    11·1 answer
  • The Fisher effect indicates that an increase in the expected inflation rate will cause the real rate of interest to:
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!