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Yuliya22 [10]
3 years ago
9

Asian Trading Company paid a dividend yesterday of $4 per share. The dividend is expected to grow at a constant rate of 7% per y

ear. The price of Asian Trading Company's stock today is $25 per share. If Asian Trading Company decides to issue new common stock, flotation costs will equal $3 per share. Asian Trading Company's marginal tax rate is 35%. Based on the above information, the cost of new common stock is
Business
1 answer:
zalisa [80]3 years ago
6 0

Answer:

$26.45

Explanation:

The computation of the cost of the new common stock is shown below:

Cost of the new common stock is

= Current year dividend ÷ (Price - flotation cost) + growth rate

where,

Current year dividend is

= $4 × 1.07

= $4.28

And, the price $25 and the flotation cost is $3

And, the growth rate is 7%

So the cost of new common stock is

= ($4.28) ÷ ($22) + 0.07

= $26.45

We simply applied the above formula

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Which of the following best describes a centralized organization
Afina-wow [57]

<u>Answer:</u>

<em>An organization in which most decision-making authority is held by upper-level management</em>

<u>Explanation:</u>

Centralisation refers to the hierarchical level within an organisation that has authority to make decisions. When decision making is kept at the top level, the organisation is centralised; when it is delegated to lower organisational levels, it is decentralised.

Centralized organization can be defined as a hierarchy decision-making structure where all decisions and processes are handled strictly at the top or the executive level. Policies are put in place to ensure the rest of the company follows the direction of the executives.

7 0
3 years ago
Macee Department Store has three departments, and it conducts advertising campaigns that benefit all departments. Advertising co
DerKrebs [107]

Answer:

Results are below.

Explanation:

Giving the following information:

Estimated overhead costs= $130,000

Total sales= 201,000 + 314,900 + 154,100= $670,000

<u>First, we need to calculate the predetermined overhead rate:</u>

<u></u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 130,000 / 670,000

Predetermined manufacturing overhead rate= $0.194 per sales dollar

<u>Now, we can allocate overhead:</u>

<u></u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

1= 201,000*0.194= 38,994

2= 314,900*0.194= 61,090.6

3= 154,100*0.194= 29,895.4

8 0
3 years ago
Assume that the yen/dollar exchange rate quoted in London at 3:00 p.m. is ×120 = $1, and the New York yen/dollar exchange rate a
Viefleur [7K]

Answer:

This question lacks answers

A. currency swap.

B. arbitrage.

C. backwardation.

D. straddle.

<u>The answer is </u><u>b.</u>

Explanation:

Arbitrage is a common practice used to gain profits from inefficient markets. Since most financial markets are inefficient by nature, dealers and similar business entities that have an interest in this kind of business practice.

The profit in arbitrage is based on the <u>imbalance in the two prices</u> on each market respectively. The term is mainly used for financial markets and various financial instruments (securities, bonds, currencies).

In the example above, the dealer becomes an arbitrageur by making a profit from the difference in the yen/dollar exchange rate in two markets (NY and London.)

8 0
3 years ago
You are to receive $500 at the end of one year; $250 at the end of two years; $300 at the end of three years. if the interest ra
Ulleksa [173]
The value is 210 dollars
6 0
3 years ago
With a regressive tax system, as the level of income increases in an economy, the average tax rate will: 
A. Increase
B. Decreas
Ostrovityanka [42]

Answer:

The correct answer to the following question is option B) decrease.

Explanation:

Regressive tax is that of tax which is imposed in such manner that when the income level in the economy increases , the average tax rate would decrease. This type of tax has heavy burden on the low income people as it takes high proportion of their income. So it can be said here that there is an inverse relationship between tax payer's ability to pay ( which can be measured in income , assets or consumption) and the tax rates imposed.

6 0
3 years ago
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