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yanalaym [24]
3 years ago
15

When different invest Assume​ Evco, Inc. has a current stock price of $ 50.00 and will pay a $ 2.00 dividend in one​ year; its e

quity cost of capital is 15 %. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current​ price
Business
1 answer:
Yakvenalex [24]3 years ago
5 0

Answer:

The correct answer is $55.5.

Explanation:

According to the scenario, the given data are as follows:

Stock Price = $50

Dividend  = $2

Equity cost   = 15%

So, we can calculate the Price of the stock after 1 year by using following formula:

Stock Price = ( Dividend + Stock price after 1 year) ÷ ( 1 +  Equity cost)

By putting the value we get

$50 = ($2 + Stock price after 1 year) ÷ ( 1 + 0.15 )

Stock price after 1 year = [$50 × 1.15] - $2

= $55.5

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Examine the quarterly sales data in a little different way. Contruct two pie charts, one for sales in 2012 and the other for sal
julsineya [31]

Answer:

sales are becoming less seasonal

Explanation:

besides constructing a pie chart, we can also answer this question by percentages (which is more exact).

2012:

total sales = $69,338

Q1 sales = $10,613 / $69,338 = 15.31%

Q2 sales = $6,424 / $69,338 = 9.26%

Q3 sales = $19,283 / $69,338 = 27.81%

Q4 sales = $33,019 / $69,338 = 47.68%

2013:

total sales = $142,238

Q1 sales = $30,342 / $142,238 = 21.33%

Q2 sales = $33,867 / $142,238 = 23.81%

Q3 sales = $34,246 / $142,238 = 24.08%

Q4 sales = $43,783 / $142,238 = 30.78%

During 2012, almost 50% of total sales happened during Q4, something similar to selling toys which are extremely seasonal due to Christmas.

During 2013, this changed since Q4 sales only represent 30% of total sales. Sales increased during Q1 and Q2, and slightly decreased in Q3. They are much more similar now, since sales are almost evenly spread throughout the year.

7 0
3 years ago
The Chandler Group wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is "looking up". A
Tems11 [23]

Answer: 6.49%

Explanation:

The constant rate of growth where the company would break even will be calculated thus:

Initial investment = Net cash inflow / (14% - g)

759000 = 57,000/(0.14 - g)

where g = growth rate

759000 = 57,000/(0.14 - g)

Cross multiply

759000(0.14 - g) = 57000

106260 - 759000g = 57000

759000g = 106260 - 57000

759000g = 49260

g = 49260/759000.

g = 0.0649

g = 6.49%

6 0
3 years ago
What does a money market account offer that a certificate of deposit (CD)
ruslelena [56]

Answer: A. You can withdraw money at any time.

Explanation:

4 0
3 years ago
Which of the following generational groups is most likely to represent the present owners of cottages surrounding Witmer Lake?A)
yawa3891 [41]
I think it’s d but try to search it D
8 0
3 years ago
The capital-to-labor ratio is:Question 40 options:a) a key element in decreasing real wages.b) high in rich countries.c) the rat
andrezito [222]

Answer:

b) high in rich countries.

Explanation:

Capital-to- labour ratio measure the degree of capitalisation of an economy.

Labour is the service that is given by workers in exchange for salaries in the production process.

Capital is the long term input that is put into the manufacturing process, usually in the form of machinery or systems that automate production.

Capital-to-labour ratio= Total capital/ Total labour

Rich countries have a high level of capitalisation of their production process, where a lot of activity is automated. So capital is high and labour input is low. This results in a high capital-to-labour ratio.

On the other hand poor countries are more labour inensive, so their capital-to-labour ratio is low.

7 0
3 years ago
Read 2 more answers
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