1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Bezzdna [24]
2 years ago
10

Excelor stock is expected to pay $3.00 per share as its next annual dividend. The firm has a policy of increasing the dividend b

y 11.0 percent annually. The stock has a market price of $13.65 and a beta of 2.8. The market risk premium is 8.56 percent and the risk-free rate is 4.90 percent. What is the cost of equity?
Business
1 answer:
andrew-mc [135]2 years ago
3 0

Answer:

30.92%

Explanation:

You find the answer by calculating the cost of equity using two methods; Dividend discount model and CAPM

<u>Dividend discount model;</u>

cost of equity; r = (D1/P0) +g

whereby, D1 = next year's dividend = 3.00

P0= current price = 13.65

g = dividend growth rate = 11% or 0.11 as a decimal

r = (3/13.65) + 0.11

r = 0.2198 + 0.11

r= 0.3298 or 32.98%

<u>Using CAPM;</u>

r = risk free + beta (Market risk premium)

r = 0.049 + (2.8 * 0.0856)

r = 0.049 + 0.2397

r = 0.2887 or 28.87%

Next, find the average of the two cost of equities;

=(32.98% + 28.87% )/2

= 30.92%

You might be interested in
A project manager has just found out that a major subcontractor for her project is consistently late delivering work. The projec
Olenka [21]

Answer:

compromise

Explanation:

Compromise as a conflict resolution strategy is one that involves finding acceptable reasons such that all the parties involved in the conflict have their concerns satisfied partly.

The project manager saying "You both will have to give up something to solve this problem" means that both parties involved in the conflict will have to come to an agreement that suits or benefits both parties.

Cheers.

6 0
2 years ago
three-fourths of the burden, and sellers bear one-fourth of the burden. b. one-half of the burden, and sellers bear one-half of
zubka84 [21]

The correct option is: For each unit of the good that is sold, buyers bear <u>one-half of the tax burden and sellers bear one-half of  the tax burden.</u>

<u>Explanation</u>:

Incidence of tax is a term referred in economics which deals with division of taxes. Tax incidence refers to division of tax among the buyer and seller for a product. The tax incidence is related to the price elasticity of supply and demand.

When a product is sold, the buyer of the product is charged with one-half of the tax burden and the seller of the product bears the other-half of the tax burden.

The incidence of tax can be observed in two ways:

i) Formal incidence

ii) Effective incidence

7 0
3 years ago
Which of the following functions of marketing involves sorting products according to their size and quality, helping to reduce t
sladkih [1.3K]

Answer:

b. The standardization and grading function

Explanation:

Based on the information provided within the question it can be said that the function of marketing that does this is the standardization and grading function. This helps the customers with buying and selling of goods by sample or description. In other words by sorting them by a specific size and quality so that customers already understand what it is and do not have to bother with a detailed assessment.

7 0
3 years ago
With 34,000 restaurants worldwide and a daily customer count of 69 million people, mcdonald's manages its product mix to generat
lidiya [134]
Oml so much to read ...
4 0
3 years ago
Match the following empires:
uranmaximum [27]

Answer:

1 ----> Matches with ----->C

2 ----> Matches with ----->D

3  ----> Matches with ----->B

4 ----> Matches with ----->A

Explanation:

This question is very easy and interesting. In this question, we just need to match the specific empires with the description given in the question. So, Let's Start.

1. The first description matches with the Dutch Empire. (C)

2. The second description matches with obviously the French Empire (D)

3. The third description matches with the English Empire. (B)

Lastly,

4. The forth description clearly matches with the Spanish Empire. (A)

So, Correct Combination will be:

1 ----> Matches with ----->C

2 ----> Matches with ----->D

3  ----> Matches with ----->B

4 ----> Matches with ----->A

8 0
3 years ago
Other questions:
  • Clark Company produces flash drives for computers, which it sells for $20 each. Each flash drive costs $12 of variable costs to
    5·1 answer
  • 1. If Net Capital Outflow increases, the ________ of dollars in the Foreign Currency Exchange Market will increase, causing the
    6·2 answers
  • Analyze fraternal polyandry in Himalayan south-central Asia with respect to material conditions. What specific problems are pose
    10·1 answer
  • Does a rising GDP benefit everyone? Explain
    6·1 answer
  • Most consumer complaints are resolved by:
    14·2 answers
  • What is the advantage of having only one inbox? a. You can take it with you wherever you go b. You never have to wonder if you a
    13·1 answer
  • Which of the following is described as an event that a company hosts to thank its loyal​ customers?
    13·1 answer
  • Colicchio Corporation acquired two inventory items at a lump-sum cost of $60,000. The acquisition included 3,000 units of knife
    11·2 answers
  • How are fixed costs different from variable costs?
    11·2 answers
  • On April 1, 2021, Austere Corporation issued $330,000 of 11% bonds at 106. Each $1,000 bond was sold with 30 detachable stock wa
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!