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levacccp [35]
3 years ago
14

Rossdale Co. stock currently sells for $73.09 per share and has a beta of 1.23. The market risk premium is 7.00 percent and the

risk-free rate is 2.86 percent annually. The company just paid a dividend of $4.33 per share, which it has pledged to increase at an annual rate of 3.35 percent indefinitely. What is your best estimate of the company's cost of equity
Business
1 answer:
vesna_86 [32]3 years ago
3 0

Answer:

Explanation:

The cost of equity can be estimated using two (2) different models:

  1. <em>The Dividend Valuation Model</em>
  2. <em>The capital asset pricing model (CAPM)</em>

<em>The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset. According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return.  </em>

The model is stated below as follows

P = D(1+g)/ke-g)  

<em>The capital asset pricing model (CAPM): relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c </em>

<em>This model is considered superior to DVM. Hence, we will use the CAPM</em>

Using the CAPM , the expected return on a asset is given as follows:

E(r)= Rf +β(Rm-Rf)

E(r) =? , Rf- 2.86%, Rm-Rf - 7.00 β- 1.23

E(r) = 2.86% + 1.23× 7%

= 2.86% + 8.61%

= 11.47 %

Cost of equity= 11.47 %

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Activity Levels and Cost Drivers Shroeder Machine Shop has the following activities:
zepelin [54]

Answer:

a. Machine Operation

Unit level, No. of units produced

b. Machine setup

Batch level, No. of batch setup

c. Production scheduling

Batch level, No. of batch setup

d. Material receiving

Unit level, Unit of material used in production of a single unit

e. Research and development

Facility level, Research done and used in development

f. Machine maintenance

Unit level, No. of units made

g. Product design

Product level, Changed product designs

h. Parts administration

Facility level, No. of parts changed

i. Final inspection of a sample of products

Batch level, No. of batched inspected

j. Materials handling

Facility level, Quantity of raw material handled

Explanation:

a. Machine Operation

Unit level, No. of units produced

b. Machine setup

Batch level, No. of batch setup

c. Production scheduling

Batch level, No. of batch setup

d. Material receiving

Unit level, Unit of material used in production of a single unit

e. Research and development

Facility level, Research done and used in development

f. Machine maintenance

Unit level, No. of units made

g. Product design

Product level, Changed product designs

h. Parts administration

Facility level, No. of parts changed

i. Final inspection of a sample of products

Batch level, No. of batched inspected

j. Materials handling

Facility level, Quantity of raw material handled

5 0
3 years ago
Respond by (1) Identifying the type of syllogism below (Categorical, Disjunctive, Conditional) and (2) explain, in your own word
Darya [45]

The syllogism used is conditional, that is, it occurs through deductive reasoning, because if the minor premise is true, the minor premise will also be true.

<h3 /><h3>What is Conditional syllogism?</h3>

It is a type of syllogism widely used in everyday life, but the conclusion is not always true, because despite having two true premises, the conclusion can be false, because the argumentation is not always valid, as it does not directly represent the premises.

Therefore, despite being syllogisms that follow the pattern of "If" and "then" to express a logic, the conclusion will not always be true, as this type of syllogism can also be hypothetical.

Find out more about syllogism here:

brainly.com/question/361872

7 0
2 years ago
A broker-dealer is physically located and registered in State A. The broker-dealer has an existing client in State A who is a st
mars1129 [50]

Answer:

D) The broker-dealer must be registered in State B in order to contact the client while she is in medical school in State B

Explanation:

Since the client will live in state B for an extended period of time, at least 4 years if she completes medical school, the broker-dealer must be registered in state B if he wishes to continue doing business with her.

If the client would have only gone to state B for a few months, then the broker could have still worked with her without registering in state B since the client could be considered on a vacation trip.

7 0
3 years ago
During its first year of operations, Crane Company had credit sales of $3,531,400; $664,000 remained uncollected at year-end. Th
Vinvika [58]

Answer:

Bad debt expense...................Dr       $36,000

            Allowance for doubtful debts                $36,000

(To record uncollectibles)

Explanation:

Certain amount of credit sales that the manager estimates to be uncollectible is called bad debts. They are written off at the end of the year. As per allowance method, estimated uncollectibles or bad debts are charged to allowance for doubtful debts.

Here, $36,000 has been estimated by the manager as estimated uncollectible

Journal entry to record uncollectibles:

Particulars                              Debit                Credit

Bad debt expense                   $36,000

       Allowance for doubtful debts                    $36,000

(To record uncollectibles)

7 0
3 years ago
Describe how surveillance of our telephones has changed over the years. explain what is different about how silicon valley compa
katrin2010 [14]

Answer:

All communication way back used to be wiretapped, but now companies have been able to encrypt their data for protection of their information against wiretapping.

Companies like silicon valley has taken the bold step in securing their data from been hacked.

The back door is risky because if a person or people exposes their information to others, their information will be at risk because of hackers who might exploit their privacy or sensitive documents.

Finally, the idea of devices to be wiretapped is not a good idea, because most people want heir privacy, for this it is termed illegal to access one's privacy without the authorization from the person.

Explanation:

Solution

Before now all communication used to be wiretapped. presently, companies are encrypting data , for the purpose of this data to not be easily wiretapped.

Silicon valley companies have secured their devices through encryption unlike other companies. what this implies is that it will be tough for police to arrest criminals, but the normal or average people will have capacity to communicate or interact much better.

The back door method is risky because, presently in today's world there are people that are specialist in hacking, so if no backdoor exist, then there will be no room for anyone to hack into someone's phone.

It is considered a risk if your phone is exposed to others to easily access your private information.

I don't like the idea for devices should be wiretapped, this is because people need their privacy, they can't have that when their phones are wiretapped.

In general it is illegal and not right.

6 0
3 years ago
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