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Vanyuwa [196]
3 years ago
10

Sweet Treats common stock is currently priced at $36.72 a share. The company just paid $2.18 per share as its annual dividend. T

he dividends have been increasing by 2.2 percent annually and are expected to continue doing the same. What is the cost of equity
Business
1 answer:
Phantasy [73]3 years ago
4 0

Answer:

Cost of equity= 8.0%

Explanation:

<em>Cost of equity can be ascertained using the dividend valuation  model. The model states that the price of a stock is the present value of future dividends discounted at the required rate of return.</em>

Cost of equity (Ke) =( Do( 1+g)/P )  + g

g - 2.2%, P - 36.72, D - 2.18

Ke = (2.18 ×(1+0.022)) /38.72  +  0.022 )  ×  100

= 0.07954 × 100

= 8.0%

 Cost of equity = 8.0%

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3 years ago
Sarah is a 50 percent partner in the SF Partnership and has an outside basis of $56,000 at the end of the year prior to any dist
Vikentia [17]

Answer:

A. $0 gain, $36,000 basis

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In the distribution, from the information given, Sarah does not recognize any gain or loss.

However, given that

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3 years ago
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Vsevolod [243]

Answer:

Indirect; investment.

Explanation:

John Maynard Keynes was a British economist born on the 5th of June, 1883 in Cambridge, England. He was famous for his brilliant ideas on government economic policy and macroeconomics which is known as the Keynesian theory. He later died on the 23rd of April, 1946 in Sussex, England.

The Keynesian link between the money market and the goods and services market is indirect. Changes in the money market must affect the investment market before the goods and services market is affected.

According to the Keynesian Transmission Mechanism, the link between the money market and the goods and services market is indirect; because at first, short-term interest rates are lowered by an increase in the supply of reserves and then with time both the bond and bank loan rates falls. Consequently, this would make investments and aggregate demand (AD curve shifts rightward) to rise or increase as a result of the low cost of capital for investors and by extension it boost the level of production or quantity of output (real gross domestic product or Real GDP).

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3 0
3 years ago
Waterway Industries buys a delivery van with a list price of $60000. The dealer grants a 13% reduction in list price and an addi
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We have to enter the van as the cost for a cash purchase and all other neccesary cost to get the van ready for use and in company's possesion.

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to this, we add up the sales tax and the extra cost for the device

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