Answer:
Cost of external equity financing 16.64%
Explanation:
Cost of external equity financing=Div*(1+g)/P (1-F) + g
F = the percentage flotation cost=4%
Div=Dividend in the current period=$3.7
g=growth=9%
P=Market price of the stock= $55
Cost of external equity financing=3.7*(1+0.09)/(55*(1-0.04))+0.09=0.166383=16.64%
A method of understanding what is done by any business is to look at it as a system for meeting the needs of a customer by changing lower-value inputs into higher value outputs by improving quality through packaging, blending, branding among other methods. This is a concept of adding value in business and identifying major types of business in a the market.
Beverly, a real estate licensee is taking up the role of a transactional broker by not representing either party to a specific real estate transaction.
<h3>Who is a transactional broker?</h3>
A transaction broker is the one that provide third-party real estate services various buyers and sellers in exchange for a comission.
Here, transactional broker is a neutral person to parties in a real estate transaction.
Hence, Beverly, a real estate licensee is taking up the role of a transactional broker by not representing either party to a specific real estate transaction.
Learn more about transactional broker here : brainly.com/question/26052661
A family owned business will consider the budget, profit, goal of the business, status of the business, among others. Although this business might have a difficulty considering the welfare of their employees when deciding an important deal. They will have a difficulty empathizing with their employees since they are more focus on their business than their people.
Answer:
At a corporate tax rate of 16.29%, both investment shall have same income, so it will be the indifference point.
Explanation:
Let take X to be the corporate tax rate
Note that 70% dividend exclusion for tax on dividend mean 30% is actually applied to dividend
Preferred dividend = 5000 * 7.75% = 387.5
Taxable dividend = 387.5 * 30% = 116.25
Interest on bond = 5000*10% = 500
For the purpose of Indifference of the two investment brought about by the two break-even corporate tax
387.5 - 116.25 * X = 500 - 500*X
500 X - 116.25 X = 500 - 387.5
383.75 X = 175
-112.5
383.75 X = 62.5
X= 62.5/383.75
X= 0.1629
X=16.29%
At a corporate tax rate of 16.29%, both investment shall have same income, so it will be the indifference point.