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stellarik [79]
4 years ago
10

Johnson Production Company paid a dividend yesterday of $3.50 per share. The dividend is expected to grow at a constant rate of

10% per year. The price of KayCee's common stock today is $40 per share. If KayCee decides to issue new common stock, flotation costs will equal $4.00 per share. KayCee's marginal tax rate is 35%. Based on the above information, the cost of new common stock is Select one: a. 19.63%. b. 20.09%. c. 26.41%. d. 17.55%.
Business
1 answer:
lara [203]4 years ago
5 0

Answer:

correct option is a. 19.63%

Explanation:

given data

dividend = $3.50 per share

constant rate = 10% per year

common stock = $40 per share

flotation costs = $4 per share

solution

we know formula that is

cost of retained earnings = \frac{Dividend}{Current price} + Growth rate

we will ignored Flotation costs  in this case

so it will be = \frac{3.5 * 1+0.1}{40} + 0.1

= 19.63 %

so correct option is a. 19.63%

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Karolina [17]

Answer:

A. $205,899 thousand

Explanation:

cash flow effect = restructuring charges - the company’s balance sheet included a restructuring accrual

                           =  $235,542 thousand - $29,643 thousand

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Therefore, The cash flow effect of Acadia’s restructuring during fiscal 2017 was $205,899 thousand.

4 0
3 years ago
Foreign Direct Investment means:________a. buying or creating facilities in another country for producing in local markets. b. b
nataly862011 [7]

Answer:

a. buying or creating facilities in another country for producing in local markets.

Explanation:

Foreign direct investments refer to establishments or acquisition of a business in a foreign country. The individual or firm involved in foreign direct investment is a citizen of a local country but starts a  business in a different country.  

Foreign direct investments are different from portfolio investments. In Portfolio investment, the investor buys securities in a foreign market, but foreign direct investment involves setting up a business or purchasing one in another country.

3 0
3 years ago
The government has imposed a fine on the Imperial Company. The fine calls for annual payments of $100,000, $250,000, and $250,00
vampirchik [111]

Answer: $615,872.50

Explanation:

The amount the National Health Center will receive is the sum of the future values, 3 years from now, of the annual payments of the fines.

Future value of $100,000 paid 1 year from today:

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= $107,122.50

Future value of $250,000 paid 2 years from now:

= 250,000 * (1 + 3.5%)

= $258,750

Future value of $250,000 paid 3 years from today:

= $250,000

Total is:

= 107,122.50 + 258,750 + 250,000

= $615,872.50

6 0
3 years ago
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3 years ago
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4 0
3 years ago
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