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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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Which statements are true? Check all that apply: C-corporations are subject to double taxation. LLCs are best for taking venture
Ronch [10]

Answer: All except " LLCs are best for taking venture capital" .

Explanation:

1. The corporations have to pay corporate tax and after that the stakeholders have to pay tax on their dividends. Hence they are subject to double taxation.

2. The number of partners in a general partnerships could be  greater than two.

3. In case of LLC and corporations, the entity is considered to separate from its owners. Hence the owners enjoy limited liability benefit.

4 0
3 years ago
What is a way Virtual Reality can be used in the construction industry?.
myrzilka [38]

The way Virtual Reality can be used understand the project needs by

monitoring progress and providing inputs in the industry.

<h3>What is Virtual Reality?</h3>

This is a simulated experience which is usually similar or different from

the real world.

This helps individuals to interact with an artificial 3-D visual and is used in

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Read more about Virtual reality here brainly.com/question/26514873

3 0
2 years ago
Hill Co. can further process Product O to produce Product P. Product O is currently selling for $60 per pound and costs $42 per
Elina [12.6K]

Answer:

(A) True

Explanation:

Differential cost is the difference between the cost to produce Product O and produce Product P; in this case it’s the additional cost of $13 per pound to produce

So the statement “The differential cost of producing Product P is $13 per pound” is true

4 0
3 years ago
What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount
UkoKoshka [18]

Answer:

.d. The equilibrium quantity would increase, and the effect on equilibrium price would be ambiguous.

Explanation:

The use of the machine would increase the supply of lattes and price falls. The supply curve would shift to the right. If scientists discover that coffees reduce heart attack, the demand for coffee would increase and price would increase. The demand curve would shift to the right.

The combined effect would be a rise in equilibrium quantity and an indeterminate effect on equilibrium price.

I hope my answer helps you

7 0
3 years ago
Upon her grandfather's death, Jordan inherited 10 shares of Universal Corp. stock that had a fair market value of $5,000. Her gr
Nastasia [14]

Answer: Jordan's recognized gain in the year of sale is $2500.

Explanation:

Given that,

Jordan inherited 10 shares of universal corp. stock upon her grandfather's death and have a fair market value of $5000

Jordan's grandfather purchase these shares in 1995 for $2500

After four months of her grandfather's death, Jordan sold all of the shares for $7500

So,

Jordan's recognized gain in the year of sale = the value of sale - the fair market value at the time of her grandfather's death

= $7500 - $5000

= $2500

4 0
3 years ago
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