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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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On October 1, 2017, Vaughn, Inc., leased a machine from Fell Leasing Company for five years. The lease requires five annual paym
Alisiya [41]

Answer:

Explanation:

1.Amount to be paid Annually to fell leasing Company = $10,000.

Incremental rate of borrowing = 11%

Lease Period = 5 yrs.

2. Value of lease equipment as on 1st October 2017 i.e., date of lease.

= 10,000 * (PVOA) = (11* for 5 years)

=10,000 * 3.6959 (using -PVAF table)

= $ 36,959

Factors are used according to the table of PVAF

3.Lease liability as on 31-12-2017

= 10,000 * PVAD (11 * 4 years) [since 4 years in these)

 = 10,000 * 3.44371

= $ 34,437.10

Lease liability as on 31st Dec 2018

= 10,000 * PVAD (11% 3 years) (still 3 yrs left as on 31-12 -2018)

= 10,000 * 2.71252 = $ 27,125.20

7 0
3 years ago
The simple rate of return focuses on accounting net operating income rather than on cash flows. Group starts
jeka94

Simple returns focus on accounting for net operating income, not cash flow. The simple method of revenue focuses on cash flow rather than accounting for net operating income.

A simple rate of return is calculated by subtracting the initial value of the investment from the current value and dividing it by the initial value. To output as%, multiply the result by 100.

Under the simple rate of return method, a dollar you receive 10 years later is considered to be worth the $ 1 you receive today. Therefore, the simple yield method can be misleading if the alternative cash flow patterns under consideration are different.

Learn more about cash flows at

brainly.com/question/735261

#SPJ4

<em>Your question is incomplete. please read below to find the full content.</em>

The Simple Rate Of Return Focuses On Accounting Net Operating Income Rather Than On Cash Flows.

A) TRUE

B) FALSE

3 0
2 years ago
there is some concern that increased use of could prompt the need for legislation protecting employee privacy rights.
djyliett [7]

There is some concern that increased use of electronic databases could prompt the need for legislation protecting employee privacy rights.

An electronic database is a computer-based collection also listing of the information. Through this the information can be searched in a fast and easy manner.

Electronic databases held organized collections of data, or information, which is thus stored in a computer in a readable form. So sometimes, the increased use of electronic databases might probably prompt the need for legislation which protects employee privacy rights.

Hence, the electronic databases can make it easier to search, query, filter and retrieve required data.

To learn more about legislation here:

brainly.com/question/13672467

#SPJ4

6 0
1 year ago
Which of the following is NOT a valid method of modifying cash flows to produce a​ MIRR? A. Turn multiple negative cash flows in
faltersainse [42]

Answer: the correct answer is A. Turn multiple negative cash flows into a single negative cash flow by summing all negative cash flows over the​ project's lifetime.

Explanation: MIRR stands for Modified Internal rate of return. If you add up all negative cash flows in just one  you are not taking into account a very important variable which is "time". It is not the same if you have a negative cash flow in 2 years than in 5 years.

4 0
3 years ago
Smart Stream Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and
weqwewe [10]

Answer:

A. $2,400,000

B. $36

C. $49

Explanation:

Base on the scenario been described in the question, we can use the following method to solve the given problem

a. Ascertain the variable costs and the variable cost amount per unit for the production and sale of 10,000 cellular phones:

The total variable cost = $2,400,000

Variable cost per unit =$240

help_outline

fullscreen

b. Ascertain the variable cost mark-up percentage for cellular phones:

Compute the desired ROI per unit:

help_outline

fullscreen

Compute the Fixed co

An attached image in given for the calculations

4 0
3 years ago
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