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irakobra [83]
3 years ago
10

The Vogt corporation paid a dividend of $4.20 on its stock in the year just ended. If the dividends are projected to grow at a r

ate of 6.4% indefinitely, and the stock is presently selling for $68 a share, what is the estimated cost of equity for Vogt?
Business
1 answer:
Jet001 [13]3 years ago
8 0

Answer:

cost of equity = 13%

Explanation:

With the info given, we will use cost of equity formula from Dividend Growth Model. THis is given by:

k_e=\frac{D_1}{P_0}+g

Where D_1 is the next year dividend or D_1 = D_0(1+g)

P_0 is current stock price

g is the growth rate

Since D_0 (dividend this year) is 4.20 and g = 6.4%  or 0.064, we can calculate D_1:

D_1=D_0(1+g)=4.2(1+0.064)=4.47

Current share price is 68, so we can now calculate cost of equity:

k_e=\frac{4.47}{68}+0.064=0.13

Hence,

cost of equity = 13%

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mars1129 [50]

The method that the interest groups need to use to help shape public policy is by enacting regulations to enforce their goals.

<h3>What does enacting laws implies?</h3>

To enact a regulation means that a person or a group set up a legal and authoritative act or they made their goals into law.

Therefore, The method that the interest groups need to use to help shape public policy is by enacting regulations to enforce their goals.

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1 year ago
Bonds from the U. S. Treasury are selling at 102. 293, bonds from Alachua County are selling at 85. 681, and bonds from the city
fgiga [73]

The security market is filled with many different types of marketable securities like shares debentures and bonds which can be traded via different trading platforms available in the securities market.

<h3>What are bonds ?</h3>

  • Bonds are the securities in the documented form which can be traded and exchanged containing a maturity date and the principle amount to be paid at maturity.

  • These are instruments of fixed income because the bearer of bonds can be said as a creditor to the issuer and will be paid the fixed amount as per the face value of the bond.

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The par value is a value which is equal to the face value of an instrument and which does not contain any  element of premium or discount.

Therefore the bonds from U.S. Treasury, from Alachua County, and from the city of Northfield will be considered to be purchased on the par value of $1,000 from each of the following irrespective of the fact that what price they are being sold in the market.

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\rm Total\:cost\:= U.S. \: tresury\: bond \:+ Alachua\:county\:bond \:+ Northfield\:bond\\&#10;\\&#10;\rm\:Total\:cost\:= \$1,000\:+\$1,000\:+\$1,000\\&#10;\\&#10;\rm\:Total\:cost\:= \$ 3,000

Hence the total cost for Lana if she purchase 1 bond from each of the following at a par value of $1,000 will be $3,000 and OPTION A is correct as per the question.

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5 0
2 years ago
What is the economic term used for sustained increase in the price of goods and services
Shkiper50 [21]

Answer:

Inflation

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Inflation refers to a situation of a general increase in the prices of goods and services in the economy. As prices of goods and services rise, the cost of living goes up. Inflation results in the purchasing power of currency to diminish.    

Economist uses the consumer prices index to determine the rate of inflation. Inflation means a basket of goods and services will cost more today than it did in the prior period. Rapid economic growth that results in too much money in circulation causes inflation.

3 0
2 years ago
The Baldwin company will sell 100 units (x1000) of capacity from their Buddy product line. Each unit of capacity is worth $6 plu
stiv31 [10]

Answer:

Amount received =   $2,210,000

Explanation:

given data

sell  = 100 units (x 1000)

capacity =  $6 + $4 per automation rating

sell capacity = 35%

to find out

how much they receive when the capacity is sold

solution

we consider here Automation rating is 7.0

we get here first Cost per unit that is here as

Cost per unit = 6 + 4 × 7

Cost per unit = 34

and capacity worth will be here as

capacity worth = Cost per unit × sell units

capacity worth = 34 ×  100000

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so that here Amount received will be as

Amount received =  capacity worth × ( 1 - sell capacity )

Amount received =  3400000 × ( 1 - 35% )  

Amount received =   $2,210,000

6 0
2 years ago
A financier plans to invest up to $500,000 in two projects. Project A yields a return of 9% on the investment of x dollars, wher
jonny [76]

Answer:

She should invest $300,000 in Project A, and $200,000 in Project B.

Explanation:

Solution

Since Project B yields a higher return, she should invest as much money as possible in it, which is 40% of the total investment  or

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The remaining $500,000 - $200,000 = $300,000 should be invested in Project A.

Therefore, she should invest $300,000 in Project A, and $200,000 in Project B.

5 0
3 years ago
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