Answer:
A)grow = 6.33%
Nxt year dividends(rounded to nearest cent): $4.31
B) The firm receives 93% (1 - flotation cost) of the market value of the shares so It receives the 42.06 per share
C) stock return 15.86%
D) required rate of return (with flotation): 16.57%
Explanation:
<u>We solve for the constant grow rate:</u>
![grow= \sqrt[5]{4.05/2.98} -1](https://tex.z-dn.net/?f=%20grow%3D%20%5Csqrt%5B5%5D%7B4.05%2F2.98%7D%20-1)
grow= 0.063280262
<u>Dividends for the sixth year:</u>
4.05 x (1.0633) = 4,306365
42.06 / (1 - flotation cost) = 45.23
flotation cost = 1 - 42.06 / 45.23 = 0.07 = 7%
rate of return without flotation:
4.31/45.23 + 0.0633 = 0.158590736 = 15.86%
solving for return considering the existence of flotation cost:
D1 4.31
P 45.23
f 0.07
g 0.0633
Ke 0.165763157 = 16.57%
Answer:
Based on the calculation made, the indicated value is $3,889.86014
Explanation:
Using direct capitalization method, indicated value can be calculated using the formula below:
Value = Annual net operating income NOI/Capitalization rate
= $44500/11.44%
Value= $3,889.86014
Based on the calculation made above, the indicated value is $3,889.86014.
Answer:
using humor to describe a situation
In a lump-sum purchase of assets, the cost must be allocated to the individual assets because every individual asset has a different useful life and different depreciation rate. Depreciation is the methodical distribution of an asset's depreciable value over the course of its useful life.
The cost of an asset, or another quantity substituted for cost, less its residual value, is its depreciable amount. Depreciation can take many different forms, including the accelerated and the straight-line depreciation.
An accountant records depreciation for all the capitalized assets that have not yet been fully depreciated at the conclusion of an accounting period.
To learn more about depreciation, click here
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Answer:
84.35%
Explanation:
The computation of Margaret’s wage replacement ratio using the top-down approach is shown below:
= 100 - Social Security payroll tax rate - saving rate
= 100 - 7.65% - 8%
= 84.35%
For determining Margaret’s wage replacement ratio, we subtract the Social Security payroll tax rate and the saving rate from the percentage value i.e 100 so that the accurate ratio can come.
