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LekaFEV [45]
3 years ago
10

Assume that Kish Inc. hired you as a consultant to help estimate its cost of common equity. You have obtained the following data

: D0 = $0.90; P0 = $27.50; and g = 7.00% (constant). Based on the DCF approach, what is the cost of common equity?
Business
1 answer:
Kobotan [32]3 years ago
8 0

Answer:

Cost of equity= 10,50%

Explanation:

The cost of equity is the return a company requires to decide if an iThe cost of equity is the return a company requires to decide if an investment meets capital return requirements. A firm's cost of equity represents the compensation the market demands in exchange for owning the asset and bearing the risk of ownership.

Cost of equity= (D1/P0)+g

D1= next year dividend (D0*

P0=actual price

g= growth rate of dividends

In this exercise:

D1=D0*(1+g)=0,90*1,07=$0,963

P0=$27,50

g=0,07

Cost of equity= 0,963/27,5+0,07=0,1051=10,50%

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If you bought a home that cost $100,000, it is currently worth $200,000, and you still owe $50,000 on it, how much equity do you
Cerrena [4.2K]

Answer:

i think it will equal 100.000

Explanation:

8 0
3 years ago
the short-run aggregate supply curve would be expected to increase (shift to the right) as a result of:
MrMuchimi

The short-run aggregate supply curve would be expected to increase (shift to the right) as a result of productivity increases or the price of key inputs falling.

<h3>What is an aggregate supply curve?</h3>

The aggregate supply curve is a curve that shows the total supply of products and goods and services. These total goods are the supply of products to the company that sells the goods.

The short-run aggregate supply curve gets right when the price of products decreases.

Thus, if productivity rises or the cost of essential inputs decreases, the short-run aggregate supply curve should rise (move to the right).

To learn more about the aggregate supply curve, refer to the link:

brainly.com/question/14020407

#SPJ4

7 0
2 years ago
There are 300 purely competitive farms in the local dairy market. Of the 300 dairy farms, 298 have a cost structure that generat
sattari [20]

Answer:

8.00%

Explanation:

The return of the 298 diaries can be computed as the profit generated divided by the amount invested initially.

percentage rate of return=profit generated/amount invested

profit generated is $24

amount invested is $300

percentage rate of return=$24/$300

percentage rate of return=8.00%

6 0
3 years ago
A(n) , or trading bloc, is a regional group of countries with a common external tariff, no internal tariffs, and coordinated law
taurus [48]

A common market, also known as a trade bloc, refers to a group of countries that have a common external tariff, to favor both in different areas, such as social and economic.

<h3 /><h3>Common market definition</h3>

It is necessary that some requirements are satisfied so that there is a common market between countries, which are, the elimination of tariffs on the import and export of goods and services.

There is also the free movement of goods, capital, services and labor between member countries, as well as the common adoption of trade restrictions to countries outside the group. An example of a common market is the European Union.

Therefore, the common market or trading bloc corresponds to a formal agreement between countries generating greater efficiency, economies of scale, increased innovation and the capacity for economic growth.

The correct answer is:

  • Common market

Find out more information about common market here:

brainly.com/question/757709

5 0
2 years ago
A trader maintains a position in a small capitalization stock that has low trading volume. The trader has a high level of which
swat32

Answer:

B) Liquidity

Explanation:

Liquidity is the ability of quickly buy or sell a stock without any price change.

Liquidity in a small-capitalization stock that has low trading volume is generally low that causes a problem for traders. It is so because in small capitalization, traders are unable to understand potential pitfalls and blindly invest in small-capitalization stocks which do not give profit as expected and the liquidity becomes low.

Hence, the correct answer is B) Liquidity.

6 0
3 years ago
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