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omeli [17]
3 years ago
7

The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 5% per year. Callahan'

s common stock currently sells for $25.50 per share; its last dividend was $2.20; and it will pay a $2.31 dividend at the end of the current year. Using the DCF approach, what is its cost of common equity
Business
1 answer:
Leviafan [203]3 years ago
5 0

Answer:

14.06%

Explanation:

The computation of the cost of common equity using the DCF method is shown below:

Cost of Common Equity = [Ending year dividend ÷ Price per share] + growth rate  

= [$2.31 ÷ $25.50] + 0.05

= 14.06%

We simply applied the above formula by considering the ending year dividend, price and the growth rate so that the correct percentage could come

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A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to
ruslelena [56]

Answer:

A 6,500

Explanation:

The number of units to be sold is calculated as;

= (Pretax income + Fixed costs) ÷ Contribution margin

Given that;

Pretax income = $35,000

Fixed costs = $420,000

Contribution margin

= Selling price per unit - Variable cost per unit

= $200 - $130

= $70

= ($35,000 + $420,000) ÷ $70

= 6,500 units

6 0
3 years ago
Why might one firm have positive cash flows and be headed for financial trouble?
Katena32 [7]
A cash flow statement merely describes the net change in a company's cash flow in investment, operational, and financial activities at a given period in time. As such, a bad debt in the company's portfolio cannot be reflected correctly in the cash flow statement. A company can also result to selling products at a much lower prices than it purchased them. While this is reflected in the cash flow statement, it does not translate into overall profitability of the concerned company.
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3 years ago
What is Kevin’s net worth on May 31, 2013?<br> $4,050<br> $9,260<br> $13,200<br> $22,460
Alchen [17]

$4,050, i got that by adding up each size than subtracting the totals

4 0
3 years ago
Read 2 more answers
The productivity gains achieved by specialization are due to A. comparative advantage. B. lower opportunity costs from switching
Ronch [10]

Answer:

Comparative advantage.

Explanation:

Comparative advantage is the ability to produce good and services at a lower opportunity cost compared to others , leading to lower selling price and competitive advantage over others .

Specialization is about concentrating on producing a few products in order to

build brands , expertise and gain maximum productivity leading to a reduction in selling price and  a comparative advantage.

4 0
4 years ago
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A mass refusal to buy products from certain employers or companies.
xeze [42]
B) boycott

I remember learning about it in the 5th grade
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