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vivado [14]
3 years ago
12

Estimating Components of both WACC and DDM Analysts estimate the cost of debt capital for Abbott Laboratories (NYSE: ABT) is 2.1

3% and that its cost of equity capital is 4.1%. Assume that ABT's marginal tax rate is 36%, the risk-free rate is 5.3%, the market risk premium is 5.7%, the ABT market price is $47.73 per common share, and its dividends are $1.26 per common share.
(a) Compute ABT's average borrowing rate and its market beta.
(b) Assume that its dividends continue at the current level in perpetuity.
Business
1 answer:
NARA [144]3 years ago
8 0

Answer:

a. Average borrowing rate= debt cost=2.13

Beta = 4.1-5.3/5.7= -0.2105

b.

Equity cost =dividend /price=1.26/47.73=0.0264= 2.64%

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3 years ago
Read 2 more answers
Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the following
maw [93]

Answer:

$250 million

Explanation:

Given that,

Cell phones:

Quantity produced = 5 million

Price per cell phone = $100

Pizza:

Quantity produced = 25 million

Price per pizza = $10

The market value of pizza is determined by the product of quantity produced and price of each pizza.

Market value of pizza:

= Quantity produced × Price per pizza

= 25 million × $10

= $250 million

8 0
3 years ago
In addition to the problems stated here, what other issue contributed to the problems faced by Native Americans on the Great Pla
frez [133]
Thank you for posting your question here at brainly. I hope the answer will help you. Feel free to ask more questions.
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5 0
3 years ago
Which of the following is not a key success factor in the country locationâ decision?
svet-max [94.6K]

Answer: D. Zoning restrictions is not a key success factor in the country location decision.

Explanation: Location of markets, labor productivity and government rules are all very important success factors a company needs to think about before making a decision on which country they want to operate in. The zoning restrictions are not as important because there are usually ways around that by picking a different place in a specific country. The location of markets to buy and sell goods, amount of labor they can expect to be useful and the governments rules on their business are all extremely important.

8 0
3 years ago
How would ShipNow divide a $ 75 comma 000 ​lump-sum purchase price for​ land, building, and equipment with estimated market valu
Burka [1]

Answer:

Land              21,150

Building        45,900

Equipment      7,950

      Cash                     75,000

Explanation:

We add up the market values then, we compare the value of each item agsinst the total value of the combo.

We apply this value to the purchase price to know how much is allocated on each concepts.

\left[\begin{array}{cccc}Item&Value&Weight&Allocated\\$Land&29610&0.282&21150\\$Building&64260&0.612&45900\\$Equipment&11130&0.106&7950\\\\$Total&105000&1&75000\\\end{array}\right]

3 0
3 years ago
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