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Pie
4 years ago
12

Credenza Industries is expected to pay a dividend of $ 1.25 at the end of the coming year. It is expected to sell for $ 70 at th

e end of the year. If its equity cost of capital is 9​%, what is the expected capital gain from the sale of this stock at the end of the coming​ year?
Business
1 answer:
Setler [38]4 years ago
6 0

Answer:

$4.64

Explanation:

The total gains for a stock can be broadly classified as both capital gains and dividend gains The capital gain depends on the price of market of the stock prevailing at the time the stock is purchased and the time of the stock sales. For a given firm, dividend gain depends on the dividend policy  

From the question given, let us analyze the following,

the expected capital gain value calculated from the sale of the given stock is   The current stock value is given by:

(price of the stock after a year + the expected dividend) / capital equity cost

($70 + $1.25) / (1+9%)

= $71.25/1.09 = 65.36  

Then,

The capital gain expected from the sale of the stock is given by:

 Expected selling price after a year -the stock current value

 $70 - $65.36

= $4.64

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Nataly_w [17]

Answer:

Profit = TR- TC
= x (P) - C(x)
= x(-0.05x+38) - (0.02x^{2} + 3x + 574.77)
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= -0.07x^{2} + 35x -574.77

This profit equation is an equation of a parabola that opens downward (Since A=-0.07<0) and has its vertex at

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P(250)=3800.23 hundred dollars

b. Profits are maximised at x=250 hundred units. The per unit price at this is,

p= -0.05x + 38&#10;= -0.05 (250) + 38&#10;= $25.5


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3 years ago
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svetlana [45]

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It eliminated the need for fixed costs.

Explanation:

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3 years ago
Revenue on account amounted to 54,000. Cash collections of accounts receivable amounted to $2,300. Expenses for theperiod were 5
Georgia [21]

Answer:

Option (D) is correct.

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3 years ago
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coldgirl [10]

Answer:

True

Explanation:

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4 years ago
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DerKrebs [107]

Answer:

c. Technological conditions

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Technological conditions -

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