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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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Sophia's goal is to run her own bakery. What degree might be beneficial for Sophia to pursue in order to reach her goal?
masha68 [24]

Answer:

Bachelor's degree in business management

Explanation:

Computer science and mathematics could help her while running the bakery, but won't be the most beneficial. Elementary education wouldn't really be at all helpful when running a business.

Sophia wants to run her own bakery, which is a business. Therefore, a bachelor's degree in business management will be the most helpful for Sophia.

5 0
4 years ago
The I-75 Carpet Discount Store has an annual demand of 10,000 yards of super shag carpet. The annual carrying cost for a yard of
insens350 [35]

Answer:

5 units and $2,175

Explanation:

a. The computation of the economic order quantity is shown below:

= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}

=\sqrt{\frac{2\times \text{10,000}\times \text{\$150}}{\text{\$0.75}}

= 2,000 units

The total cost of ordering cost and carrying cost equals to

= Annual ordering cost + Annual carrying cost

= Purchase cost + Annual demand ÷ Economic order quantity × ordering cost per order + Economic order quantity ÷ 2 × carrying cost per unit  

= 10,000 × $8 + 10,000 ÷ 2,000 × $150 + 2,000 ÷ 2 × $0.75

= 80,000 + $750 + $750

= $81,500

Now in case of ordering 5,000 yields at discount price of $6.50 the total cost is

= Purchase cost + Annual demand ÷ Economic order quantity × ordering cost per order + Economic order quantity ÷ 2 × carrying cost per unit  

= 10,000 × $6.50 + 10,000 ÷ 5,000 × $150 + 5,000 ÷ 2 × $0.75

= $65,000 + 300 + $1,875

= $67,175

Therefore there will be 5 units should store at a time and cost of inventory is 300 + $1,875 = $2,175

3 0
3 years ago
if convertible preferred stock is used to compute diluted earnings per share, how will the numerator of the diluted eps equation
Dafna11 [192]

The convertible stock's yearly preferred dividend should be reinstated.

<h3>What is the stock price?</h3>

A share price is the price of a single share of a company's salable equity shares. In layman's terms, the stock price is the largest amount of money someone is willing to pay for the stock or the lowest amount for which it can be purchased.

Diluted earnings per share (EPS) is calculated by taking a company's net income, deducting any preferred dividends, and dividing the result by the weighted average number of outstanding shares plus dilutive shares (convertible preferred shares, options, warrants, and other dilutive securities).

Therefore, The stock's yearly preferred dividend should be reinstated.

Learn more about stock prices here:

brainly.com/question/15021152

#SPJ1

4 0
1 year ago
All I’m Saying Corporation produces and sells a single product. Data concerning that product appear below: Selling price per uni
dexar [7]

Answer:

Break-even point in units= 12,769 units

Explanation:

Giving the following information:

Selling price per unit= $170

Variable expenses per unit= $81.10

Fixed expense per month= $997,920

Monthly target profit of $137,240

To determine the number of units to be sold, we need to use the break-even point in units formula. We need to add the desired profit.

Break-even point in units= (fixed costs + desired profit) / contribution margin per unit

Break-even point in units= (997,920 + 137,240) / (170 - 81.1)

Break-even point in units= 12,769 units

4 0
3 years ago
A good description of source inspection is inspecting: a. materials upon delivery by the supplier. b. the goods at the productio
trasher [3.6K]

Answer: e) One's own work.

Explanation:

Source inspection is the examining or checking that is used for inspecting quality of goods and quality control process. This process is carried through source inspector for surveillance of product or goods own working and function.

Other options are incorrect because source inspection does not investigates design specification, delivered goods, supplier plant products and products at production department.Thus, the correct option is option(e).

4 0
3 years ago
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