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lora16 [44]
4 years ago
6

To help them estimate the company's cost of capital, Smithco has hired you as a consultant. You have been provided with the foll

owing data: D1 = $1.45; P0 = $22.50; and gL = 6.50% (constant). Based on the dividend growth approach, what is the cost of common from reinvested earnings?a. 11.10%b. 11.68%c. 12.30%d. 12.94%e. 13.59%
Business
1 answer:
Zarrin [17]4 years ago
3 0

Answer:

Option (D) is correct.

Explanation:

Cost of common stock:

= (Expected dividend at the end of Year 1 ÷ Price of stock) + Growth rate.

= (1.45 ÷ 22.50) + 0.065

= 0.0644 + 0.065

= 0.1294 i.e., 12.94%

Conclusion:-

Cost of common stock = 12.94%

Note:-

D1 = Expected dividend at the end of Year 1,

P0 = Current price of common stock, and

gL = Growth level i.e., growth rate in dividend.

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Arthur is a 30 percent partner in the CAR Partnership. At the beginning of the tax year, Arthur's basis in the partnership inter
laila [671]

Answer:

c. $87,000

Explanation:

The computation of the Arthur's basis in the partnership interest at the end of the year is shown below:

= His share of partnership liabilities + net operating income share + increased share in liabilities - distributed amount

= $60,000 + $12,000 + $20,000 - $5,000

= $87,000

Net operating income share is

= $40,000 × 30%

= $12,000

We simply applied the above formula

3 0
4 years ago
You need to have $32,250 in 9 years. You can earn an annual interest rate of 4 percent for the first 5 years, and 4.6 percent fo
baherus [9]

Answer:

The deposit today is:

C. 22142.99

Explanation:

a) Data and Calculations:

Future expected value = $32,250

Time period = 9 months

Annual interest rate = 4% for the first 5 years

Annual interest rate = 4.6% for the next 4 years

Today's deposit to earn the above future value is calculated from an online financial calculator as follows:

N (# of periods)  5

I/Y (Interest per year)  4

PMT (Periodic Payment)  0

FV (Future Value)  26940.33

Results

PV = $22,142.99

Total Interest $4,797.34

N (# of periods)  4

I/Y (Interest per year)  4.6

PMT (Periodic Payment)  0

FV (Future Value)  32250

PV = $26,940.33

Total Interest $5,309.67

5 0
3 years ago
Scarcity means that there are more wants than one can meet based on the limited amount of resources.
vova2212 [387]
I believe the answer is false
I hope this helps!
4 0
3 years ago
What is the difference between financial and managerial accounting ?
horrorfan [7]

Answer:

Financial accounting refer to the financial statement while, managerial is more focus into internal reports

In details, the most difference are as follows:

Aggregation.

Financing reports on the complete firm. While Managerial; at product, division or customer level.

Proven information.

Financing require certain criteria to ensure precision. It need to prove correct to third parties. While Managerial uses budget, forecast and estimated values.

Reporting focus.

Financial accounting is oriented toward outside

Managerial accounting analysis stays within a company.

Legislation:

Financial accounting faces the GAAP, IFRS and heavy legislation.

Managerial accounting doesn't

Time period.

Financial accounting has a historical orientation their reports are resumes of past transactions and operations.

Managerial accounting has a future orientation.

Timing.

Financial Statement are done at end of an accounting period.

Managerial accounting issues on demand of the board or supervisor.

8 0
4 years ago
Anyone want brainly??
Natalija [7]

wdym brainly or brainliest???

4 0
2 years ago
Read 2 more answers
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