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
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

You might be interested in
For each scenario, decide whether it creates a producer or a consumer surplus. Then, calculate the ensuing surplus.
Gnom [1K]

Answer:

Alice's consumer surplus =  $5

Jeff's consumer surplus = $16

Nicole's producer surplus = $1

Explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of a good.

Consumer surplus = willingness to pay - price of the good

Producer surplus is the difference between the price of a good and the least price the producer is willing to accept

Producer surplus = price of the good - least price the producer is willing to accept

Alice's consumer surplus = $30 - ($35 - $10) = $5

Jeff's consumer surplus = $20 - [$16 - (0.75 x $16)] = $16

Nicole's producer surplus = $501 - $500 = $1

5 0
3 years ago
he following production data were taken from the records of the Finishing Department for July: Inventory in process, July 1, 30%
natita [175]

Answer:

The total equivalent units for conversion costs is 40,600.

Explanation:

Under the first-in, first-out method, units that were incomplete for last year are the first to be completed, followed by units started during the year.

<u>Calculation of the total equivalent units for conversion costs :</u>

To Finish Opening Work In Process (5,000 × 70%) =   3,500

Started and Completed ((40,500 - 5,000) × 100 %) = 35,500

Closing Work In Process ( 4,000 × 40%)                  =    1,600

Total equivalent units for conversion costs             = 40,600

Conclusion :

The total equivalent units for conversion costs is 40,600.

5 0
3 years ago
Do the methods below use Cash Flows or Operating Income
KatRina [158]

Answer: c

Explanation:

8 0
3 years ago
Modified Accelerated Cost Recovery System (MACRS) (LO 7.4) Mike purchases a new heavy-duty truck (5-year class recovery property
posledela

Answer: See explanation

Explanation:

a. The amount of depreciation for 2017 using financial accounting straight-line depreciation will be:

= $39000 × 8months/5 years

= $39000 × 8months / 60months

= $39000 × 8/60

= $5200

b. The amount of depreciation for 2017 using the straight-line depreciation election will be:

= $39000 × 10%

= $39000 × 0.1

= $3900

c. The amount of depreciation for 2017, including bonus depreciation but no election to expense, that Mike could deduct using the MACRS tables will be:

= ($39000/2) + $3900

= $19500 + $3900

= $23400

d. If there is no income limit on the expense election, the amount of depreciation for 2017 including bonus depreciation and the election to expense that Mike can deduct will be:

= $25000 + $7000 + $1400

= $33400

4 0
3 years ago
Which of the following activities is a way that retailers help to lower the cost
IceJOKER [234]

Answer:

combining shopmente6of prod6

6 0
3 years ago
Other questions:
  • Jeffrey Company wants to double production of Product X from 1,000 units to 2,000 units. The variable manufacturing cost per uni
    13·2 answers
  • Four roommates are planning to spend the weekend in their dorm room watching old movies, and they are debating how many to watch
    11·1 answer
  • An asian buyer meets with a broker and asks to be shown homes. if she doesn't ask to see homes in areas with no asian residents,
    9·1 answer
  • The most effective audit procedure for determining the collectibility of an account receivable is the
    10·1 answer
  • A software firm has an opening for a software programmer. Jason, the HR manager, is making a list of all the tasks, duties, and
    6·1 answer
  • Magic City Enterprises manufactures a beautiful bookcase. Listed below are a number of costs incurred. Identify each cost as eit
    15·1 answer
  • HELP QUICK! Scanners, copiers, webcams, flash drives, and printers are examples of
    14·2 answers
  • A policy of permitting the people of a country to buy and sell where they please, without restrictions, is called:
    11·1 answer
  • The makings of a good currency Instead of using money, people could simply barter one good for another. Which of the following i
    14·1 answer
  • if a merchandiser records a debit to accounts receivable and a credit to sales revenue, they have most likely
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!