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pochemuha
3 years ago
6

White Lion Homebuilders is considering investing in a one-year project that requires an initial investment of $500, 000. To do s

o, it will have issue new common stock and will incur a flotation cost of 2.00%. At the end of the year, the project is expected to produce a cash inflow of $595, 000. The rate of return that White Lion expects to earn on its project (net of its flotation costs) is _________ (rounded to two decimal places).
Alpha Moose Transporters has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.45 at the end of next year. The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 9.40% into the foreseeable future. If Alpha Moose expects to incur flotation costs of 6.50% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be _________.

White Lion Homebuilders Co.'s addition to earnings for this year is expected to be $745, 000. Its target capital structure consists of 35% debt, 5% preferred, and 60% equity.

Determine White Lion Homebuilders's retained earnings breakpoint:

a. $1, 552, 084

b. $1, 117, 500

c. $1, 241, 667

d. $1, 427, 917
Business
1 answer:
MissTica3 years ago
4 0

Answer:

C.

Explanation:

a) Required around for investment is $500,000

Flotation cost is 2%

Total amount require to issue =

$500,000/ (1-2%)

= $510,204,08

After one year value of investment will be $595,000

Rate of return =

550000/(450000x(1+2%)-1 =19.8%

b) 2.03/(33.35x(1-3.75%) + 9.4 = 15.72%

c) 745000/60% = 1241666.67

That is C. $124,1666,67

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7 0
2 years ago
Yeloe Corporation sells 400 shares of common stock being held as an investment. The shares were acquired six months ago at a cos
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Answer:

a.

Explanation:

Cash (400*40)              Dr.$16,000

Loss on sale of stock investments (400*40-400*600  Dr.$8,000

Stock Investments  (400*60)                                          Cr.$24,000

As the stock was sold $20 below its purchase price therefore $20*400 will be recorded as loss on investments.The loss on investments and Cash will be debited and investments have decreased therefore credited.

6 0
3 years ago
Why is positive wording more effective in business messages than negative wording?
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Positive wording has an effect on the message getting received, which is the goal.
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3 years ago
If businesses are producing at capacity, and the nation is experiencing almost full employment (a very low rate of unemployment
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3 years ago
n 2010, the country of Vesey exported goods worth $312 billion and services worth $198 billion. It imported goods worth $525 bil
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Answer:

current account balance = $271.8 billion

Explanation:

given data

exported goods worth = $312 billion

exported services worth = $198 billion

imported goods worth =  $525 billion

imported services worth = $255 billion

sent famine relief to Africa = $1.2 billion

received = $3 billion

to find out

current account balance in Vesey

solution

we know that current account balance as

current account balance = total expenses - total revenue .............1

here

total expenses are = $525  + $255 + $3 = $783 billion

and total revenue = $312 + $198 +$1.2 = $511.2 billion

so from equation 1

current account balance = $783 billion - $511.2 billion

current account balance = $271.8 billion

7 0
3 years ago
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