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Oksanka [162]
1 year ago
7

If ABC corporation paid a dividend of $6 per share last year. The stock currently sells for $80 per share. You estimate that the

dividend will grow steadily at a rate of 6% per year into the indefinite future. What is the cost of equity
Business
1 answer:
saul85 [17]1 year ago
4 0

The cost of equity is 13.95%.

<h3>What is stock?</h3>
  • Stock (sometimes known as capital stock) in the financial industry refers to the shares into which ownership of a corporation or company is divided.
  • A single share of stock represents a fractional ownership interest in the company based on the total number of shares.
  • The shareholder (stockholder) will then typically be entitled to that portion of the company's earnings, proceeds from the sale of company assets (after paying off all senior claims such as secured and unsecured debt), or voting rights, with these rights frequently being distributed in proportion to the amount of money each stockholder has invested.
<h3>What is Share?</h3>
  • A share is a unit used in mutual funds, limited partnerships, and real estate investment trusts in the financial markets.
  • Share capital is the collective term for an organization's shares.
  • A shareholder (or stockholder) of a corporation is someone who owns shares in that company.
  • A share is an undividendable piece of capital that expresses the shareholder's ownership of the company.

Learn more about Share here:

brainly.com/question/13931207

#SPJ4

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The Federal Reserve carries out open-market operations, buying $2 million worth of Treasury Bills from banks. This action increa
klemol [59]

Answer:

67%

Explanation:

Money supply = Money multiplier * Deposit worth

3 = Money multiplier * 2

Money multiplier = 3/2

Money multiplier = 1.5

Now, Money multiplier = 1 / Reserve ratio

1.5 = 1 / Reserve ratio

Reserve ratio = 1/1.5

Reserve ratio = 0.6667

Reserve ratio = 67%

So, the percent of deposits the banks hold as reserves is 67%

7 0
3 years ago
Consider two markets: the market for cat food and the market for dog food. The initial equilibrium for both markets is the same,
Yakvenalex [24]

Answer:

Elasticity of supply for dog food = 0.95

Explanation:

From the question, we have:

New quantity supplied of dog food = 107.0

Old quantity supplied of dog food = Initial equilibrium quantity = 21.0

New price = $8.75

Old price = Initial equilibrium price = $1.50

Generally, the formula for calculating the elasticity of supply is as

follows:

Elasticity of supply = Percentage change in quantity supplied / Percentage change in price ................ (1)

Where, based on the midpoint formula, we have:

Percentage change in quantity supplied of dog food = {(New quantity supplied of dog food - Old quantity supplied of dog food) / [(New quantity supplied of dog food + Old quantity supplied of dog food) / 2]} * 100 = {(107.0 - 21.0) / [(107.0 + 21.0) / 2]} * 100 = 134.375%

Percentage change in price = {(New price - Old price) / [(New price + Old price) / 2]} * 100 = {(8.75 - 1.50) / [(8.75 + 1.50) / 2]} * 100 = 141.463414634146%

Substituting the values into equation (1), we have:

Elasticity of supply for dog food = 134.375% / 141.463414634146% = 0.94989224137931

Approximated to 2 decimal places, we have:

Elasticity of supply for dog food = 0.95

6 0
3 years ago
The investment most affected by local conditions is:
Tems11 [23]

Savings accounts . . .
     interest rates are most determined by the state of
         the national economy.

Mutual funds . . .
Treasury bills . . .
     traded on nationwide exchanges; prices and returns
        are pretty uniform nationwide.

Real estate . . .
     rests directly on local conditions in each city, and sometimes even in
        different parts of the same city;
     affected by things like local unemployment, local bad weather,
        local price of gas, local tourism, local special events, etc.

4 0
3 years ago
Read 2 more answers
He decides to take the company public through an IPO, issuing 2 million new shares. Assuming that he successfully completes the
Salsk061 [2.6K]

Answer:

$36.79

Explanation:

Calculation to determine What will be the IPO price per share

First step is to calculate the Cumulative shares

Cumulative shares = 375,000 + 400,000 + 250,000 + 400,000 + 2 million

Cumulative shares = 3.425 million

Now let calculate the IPO price

IPO price = $14 × $9 million / 3.425 million

IPO price= $36.79

Therefore What will be the IPO price per share is $36.79

4 0
3 years ago
Last year, Cool Lope, Inc. had an inventory turnover rate of 6.8. This year, the turnover rate is 7.1. Based on this information
AnnyKZ [126]

Answer:

The answer is D.

Explanation:

Inventory turnover is a measure of the number of times inventory is sold in a given period of time period such as in a quarter or in a year.

The formula is Cost of goods sold ÷ the average inventory.

Higher inventory is better than lower inventory because the higher the inventory turnover, the better a business is selling goods(inventories) very quickly and that demand for their product exists. While low inventory turnover depicts weaker sales and declining demand for a company's products

8 0
3 years ago
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