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ololo11 [35]
3 years ago
14

Haulsee Inc. pays no dividend currently but is expected to start paying a small dividend next year. The 5-year-old firm has a be

ta of 1.25 and current earnings of $0.90 per share. The current Treasury bill rate is 6.10%, and the market risk premium is 8.8%. Determine Haulsee's cost of equity if the firm's tax rate is 40%.
Business
1 answer:
wlad13 [49]3 years ago
8 0

Answer:

17.10%

Explanation:

The computation of the cost of equity is shown below:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

= 6.10% + 1.25 × 8.8%

= 6.10% + 11%

= 17.10%

The  (Market rate of return - Risk-free rate of return)  is also known as market risk premium and the same is applied.

All other information which is given is not relevant. Hence, ignored it

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Spacefood Products will pay a dividend of $ 2.25 $2.25 per share this year. It is expected that this dividend will grow by 3 3​%
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Answer:

$32.14 per share

Explanation:

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2 years ago
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Union members earn "about 20% more" than non-union members, even after adjusting for factors such as "years of work experience and education level.".

<h3>Who are Union and Non-Union members?</h3>

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The reasons for union workers paid more are-

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To know more about the roles of labour union, here

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Answer:

Please see attachment

Explanation:

Please see attachment

Download pdf
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