Answer:
The cost of internal equity is 11.18%
Explanation:
The constant growth model of DDM can be used to calculate the price of a stock if the growth rate in the dividend is expected to remain constant. The DDM values the stock based on the present value of the expected future dividends from the stock.
The formula for price today under DDM is,
P0 = D0 * (1+g) / r - g
We already know the P0, the D0 and the g. We can plug in these values in the formula to calculate r which is the cost of equity capital.
32 = 1.25 * (1+ 0.07) / (r - 0.07)
32 * (r - 0.07) = 1.3375
32r - 2.24 = 1.3375
32r = 1.3375 + 2.24
r = 3.5775 / 32
r = 0.11179 or 11.179%
Answer:
Journal Entry
Job 233
Dr Wage Control A/c $10,600
Cr. Work in Process A/c $10,600
Job 234
Dr Wage Control A/c $12,300
Cr. Work in Process A/c $12,300
Explanation:
Work in process account is used to record all the cost of manufacturing products which is under process. This account maintain the records of product under process and transferred these costs when products are completed.
Job 233
Wage expense = 530 x $20 = $10,600
Job 234
Wage expense = 615 x $20 = $12,300
Answer:
GDP will reduce by 4%
Explanation:
According to Okun, a 1% increase in unemployment will cause a 2% decrease in the level of GDP, and a 1% decrease in unemployment will lead to a 2% increase in the level of GDP.
What this means is that for every increase in unemployment, there is a corresponding double reduction effect on GDP.
In the scenario presented above, we can see that unemployment has gone from 4% to 6%, this means that there has been a 2% increase in unemployment. This 2% increase will therefore cause a 4% decrease in the GDP.
Answer:
Interest per year = $600
Explanation:
Given:
Amount invested = $7,500
rate of interest = 8%
Find:
Interest per year
Computation:
Interest per year = Amount invested x rate of interest
Interest per year = $7,500 x 8 %
Interest per year = $600
Answer:D. Cost- based pricing
Explanation:
This is when a fixed percentage is added to the cost of goods sold in determining the sales price. This guaranteed the cost are not only covered, but profits are also guaranteed on the transaction.
