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%
Answer:
The correct option is D,$42,000
Explanation:
The balance on Maxwell capital account=market value of building contributed less the mortgage on the building
market value of the building is $89,000
Mortgage on the building is $47,000
balance on Maxwell capital account=$89,000-$47,000
balance on Maxwell capital account=$42000
The correct option is D.
Care must taken so that one does include the cash of $38,000 contributed by Smart in Maxwell's capital account balance calculation,otherwise one would have concluded that option E,$80,000($42,000+$38,000)
Answer:
Margin of safety = $300000
Explanation:
The margin of safety is the amount or units in excess of the break even level of sales or units. It is the region beyond the break even point and represents the profit for the business. Any units in excess of the break even point represents the margin of safety.
The margin of safety for the given question with expected sales of $500000 and break even sales of $200000 can be calculated as follows,
Margin of safety = 500000 - 200000 = $300000
A negative externality or spillover cost occurs when the total cost of producing a good exceeds the costs borne by the producer.
- Spillover costs, commonly referred to as "negative externalities," are losses or harm that a market transaction results in for a third party. Even though they were not involved in making the initial decision, the third party ultimately pays for the transaction in some way, according to Fundamental Finance.
- An incident in one country can have a knock-on effect on the economy of another, frequently one that is more dependent on it, known as the spillover effect.
- Externalities are the names for these advantages and costs of spillover. When a cost spills over, it has a negative externality. When a benefit multiplies, a positive externality happens. Therefore, externalities happen when a transaction's costs or benefits are shared by parties other than the producer or the consumer.
Thus this is the answer.
To learn more about spillover cost, refer: brainly.com/question/2966591
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