Answer:
cost of equity = 13%
Explanation:
With the info given, we will use cost of equity formula from Dividend Growth Model. THis is given by:
Where D_1 is the next year dividend or D_1 = D_0(1+g)
P_0 is current stock price
g is the growth rate
Since D_0 (dividend this year) is 4.20 and g = 6.4% or 0.064, we can calculate D_1:
Current share price is 68, so we can now calculate cost of equity:
Hence,
cost of equity = 13%
Answer:
B. Annuity due
Explanation:
Annuity Due
This is the repetition of money paid that is made at the beginning of each defined period. Period could be monthly, quarterly, yearly and so on. A common example used in explaining this is Rent paid at the beginning of each month. Annuity due have all payments in the same amount, like in this case, Janis is going to be paid $500 a month for 48 months. Meaning the amount tonbe paid doesnt changes. Also another characteristic of annuity payments is that all payments are paid at thesame time interval. Again, here, Janis is being paid every month at the same time interval NOT, today monthly and the next payment weekly.
It is a series of payments that is made or received over a predetermined period of time.
There were no effects the great depression has on the credit industry. There was instead insider trading. people didn't care about the dangers of inside trading. But then WWII put the US back on track.
The effects Postwar Era had been good. Consumer borrowing increased. the G.I Bill was used by thousands of veterans to go to college or buy homes. Wages were mostly higher now and there were many jobs out there.
Answer:
Graphic Designs
The firm will have to pay $6.40 per share next quarter.
Explanation:
a) Data and Calculations:
Number of cumulative preferred stock outstanding = 68,000
Preferred dividends per share = $1.60 per quarter
For four quarters, the preferred dividends per share = $6.40 ($1.60 * 4)
b) This will take care of the past three quarters that have accumulated and the fourth quarter. Note that when a company wishes to pay a common stock dividend, it must pay the cumulative preferred dividends first, no matter the length of period that the dividends have accumulated.
