3. A major advantage for some people

Suppose Powers Ltd., just issued a dividend of $1.20 per share on it common stock. The company paid dividends of $.85, $.92, $.9

tino4ka555 [31]

Answer: 11.48%; 11.47%

Explanation:

Given that,

Dividend Issued on common stock = $1.20 per share

Dividend paid in last four years:

$.85 per share

$.92 per share

$.99 per share

$1.09 per share

Stock currently sells at = $53

Calculation of growth rates in dividends :

G1 = $\frac{0.92-0.85}{0.85}$

= 8.24%

G2 = $\frac{0.99-0.92}{0.92}$

= 7.6%

G3 = $\frac{1.09-0.99}{0.99}$

= 10.1%

G4 = $\frac{1.20-1.09}{1.09}$

= 10.09%

(1) Arithmetic growth Rate = $\frac{8.24+7.6+10.1+10.09}{4}$

= 9.01%

Cost of Equity = $\frac{(1.20)(1.0901)}{53}+0.0901$

= 11.48%

(2) Geometric growth Rate

$1.20=0.85(1+g)^{4}$

G = 9%

Cost of Equity = $\frac{(1.20)(1.09)}{53}+0.09$

= 11.47%

5 0

3 years ago

If the minimum attractive rate of return is 7%, which alternative should be chosen assuming identical replacement (like kind exc

ira [324]

Answer:

The alternative that should be chosen assuming identical replacement is:

Alternative B.

Explanation:

a) Data and Calculations:

Alternatives:

A B

First Cost $5,000 $9,200

Uniform Annual Benefit $1,750 $1,850

Useful life, in years 4 8

Rate of return 7% 7%

Annuity factor 3.387 5.971

Present value of annuity $5,927.25 $11,046.35

Net cash flow $927.25 $1,846.35

b) Alternative B yields a higher return than Alternative A. Since the two alternatives are based on the same rate of return, Alternative B will bring in a higher annual benefit, even when discounted to the present value.

7 0

3 years ago

Selected information from Rockway, Inc.'s U.S. GAAP financial statements for the year ended December 31, included the following

Scrat [10]

Answer:

Cash flow from operating activties 3,800,000

Explanation:

Cash collected from sales:(A) 21,000,000

Cash paid to supplier (B) (15,200,000)

Interest paid (1,000,000)

income taxes paid (1,000,000)

Cash flow from operating activties 3,800,000

(A)we use the sales and account receivable account

3,000,000 + 21,000,000 - 2,500,000 = 21,500,000

(B) we solve for purchases with COGS and inventory

purchases:

15,000,000 + 3,000,000 - 2,400,000 = 15,600,000

and now, with purchase along wiht account payable we solve for

paid to suppliers

1,000,000 + 15,600,000 - 1,400,000 = 15,200,000

3 0

3 years ago

Roll over each factor to read the description. While prediction is imperfect, identify which of the factors below are better sho

ra1l [238]

The long range predictors in the question are:

Relative monetary growth
relative inflation rates
nominal interest rate differentials

The short range predictors in the question are:

psychological factors
investor expectations
bandwagon effects

<h3>What are long range indicators?</h3>

These are the indicators that are able to provide a prediction for the way that an economy would be in the future.

<h3>What are short range indicators?</h3>

These are the instruments that are used periodically to check the economic trends whioch happenly usually more than once in a year.

Read more on economic indicators here: brainly.com/question/903754

4 0

2 years ago

to what extent do you think the 'big four' supermarkets should change their strategies and adopt the discounter model?

rusak2 [61]

The major four grocery chains are known as the "Big 4," with Tesco, Sainsbury's, Asda, and Morrisons maintaining their dominance for many years.

<h3>What changes should be brought by the big four?</h3>

Discounters have been expanding their market share, and by 2020 this is predicted to increase. If the big four don't alter their strategy, they risk losing ground. When it comes to net profit margin, the discounter model appears to be more efficient.

The major four Especially if profitability is the primary emphasis of business objectives, you might wish to adopt some components of the method, such as having some discount lines, concentrating on smaller product lines, becoming leaner, and reducing administrative costs.

Depending on how they perceive their own strengths and shortcomings as well as the chances and challenges that lie ahead, they may come to different conclusions.

Learn more about the discounter model, from:

brainly.com/question/14852055

#SPJ1

6 0

1 year ago