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luda_lava [24]
3 years ago
11

Suppose Stark Ltd. just issued a dividend of $1.59 per share on its common stock. The company paid dividends of $1.25, $1.33, $1

.40, and $1.51 per share in the last four years. a. If the stock currently sells for $40, what is your best estimate of the company’s cost of equity capital using the arithmetic average growth rate in dividends? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. What if you use the geometric average growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Business
1 answer:
vlada-n [284]3 years ago
8 0

Answer:

Explanation:

arithmetic average growth rate = {[(1.33 - 1.25)/1.25] + [(1.40 - 1.33)/1.33] + [(1.51 - 1.40)/1.40] + [(1.59 - 1.51)/1.51]} / 4 = {0.064 + 0.053 + 0.079 + 0.053} / 4 = 0.06225 x 100 = 6.225%

geometric growth rate = ⁴√{0.064 x 0.053 x 0.079 x 0.053} = 0.061%

a) using arithmetic average growth rate

Div₁ = $1.59 x 1.06225 = $1.689

P₀ = $40

g = 6.225%

40 = 1.689 / (Re - 0.06225)

Re - 0.06225 = 1.689 / 40  = 0.04222

Re = 0.04222 + 0.06225 = 0.10447 = 10.45%

b) using geometric average growth rate

Div₁ = $1.59 x 1.061 = $1.68699

P₀ = $40

g = 0.061%

40 = 1.68699 / (Re - 0.061)

Re - 0.061 = 1.68699 / 40  = 0.04217

Re = 0.04217 + 0.061 = 0.103174 = 10.32%

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EasyOpen Inc. gained a patent for an electronic corkscrew. Soon the company made a huge profit on this device. Recently, however
n200080 [17]

Answer:

<em>2. EasyOpen's patent expired after 20 years</em>

Explanation:

<em>Patent rights last for about a limited period of time, as well as the right to file a lawsuit on other sides for infringement of the patent is centered on that time. </em>

Inventors and other patent proprietors may therefore choose to measure and evaluate their patent's expiry date.

It will mostly rely heavily on the date of filing of your patent application, and also the sort of patent they obtained.

Patents are defined as utility patents, patents on designs or patents on plants.

Patent protection for utility patents, which are the most common type of patent, and which EasyOpen Inc is part of, lasts 20 years after the patent application's filing date.

5 0
3 years ago
Which one of the following is not a function of​ money? A. Medium of exchange. B. Store of value. C. Open market operation. D. U
Lisa [10]

Answer:

The correct answer is C

Explanation:

Money is the term which is described as something which serves as exchange medium, store of value and a unit of accounting. It is a exchange medium in the terms, that the person will agree to receive it by making a transaction.

In short, when depositing the money into any financial institution like banks, then this states the store of value function of the money.

Therefore, the one which is not the function of money is that it has the operations in the open market.

3 0
3 years ago
Colson Inc. declared a $320,000 cash dividend. It currently has 12,000 shares of 7%, $100 par value cumulative preferred stock o
Alex787 [66]

Answer:

The divided for common stockholders is $152000

Explanation:

The preferred stock is cumulative whch means any arrears in preference dividend will be paid whenever the dividend is declared.

The amount of yearly preference dividends is = 12000 * 100 * 0.07 = 84000

Thus, when 320000 cash dividend is declared, 2 years ( current year and arrear year) preference dividend will be paid first and the remaining will be distributed among common stock holders.

The dividedn for common stockholders is 320000 - (84000 * 2) = $152000

4 0
3 years ago
when the percentage change in the price is greater htan the resulting percentage change in quantity demanded,
Oliga [24]
The price elasticity of supply is given by a similar formula: If the percentage change in quantity demanded is greater than the percentage change in price, demand is said to be price elastic, or very responsive to price changes.
7 0
2 years ago
Question: Do you think people have one true calling in life or are we all multipotentialites?
icang [17]

These people are held up as shining examples for the rest of us, and—while people like this certainly exist (no hate intended to the focused few!)—many of us simply don’t fit into their model. Through social cues and conditioning, we learn to believe in the romantic notion of the One True Calling: the idea that we each have one great thing we are meant to do with our life—OUR DESTINY!

What happens if you don’t fit into this framework? Let’s say you’re curious about several subjects, and there are many things you’d like to do with your life. If you’re unable or unwilling to settle on a single career path, you might worry that you don’t have One True Calling like everybody else, and that, therefore, your life lacks purpose.

It doesn’t. In fact, there is a very good reason for your tendency to shift between things, to devour new knowledge and experiences, and to try on new identities.

You are a multipotentialite

Have you been nodding your head along as you read? Good news! You are probably a multipotentialite: someone with many interests and creative pursuits. If this is the first time you’ve encountered the word, it might seem like a mouthful. If you have a hard time with multipotentialite or it doesn’t feel like a good fit for you, there are other options. Here are the most common terms for the kind of person we’re talking about:

Multipotentialite: someone with many interests and creative pursuits

Polymath: someone who knows a lot about many different things or a person of encyclopedic learning

Renaissance Person: a person who is interested in and knows a lot about many things

Jack-of-All-Trades: a person who can do passable work at various tasks; a handy, versatile person

Generalist: one whose skills, interests, or habits are varied or unspecialized

Scanner: someone with intense curiosity about numerous unrelated subjects (coined by Barbara Sher in her great book Refuse to Choose!)

Puttylike (adj.): able to embody different identities and perform a variety of tasks gracefully

There is no single way to be a multipotentialite. Some of us have a dozen projects on the go at once, others prefer to dive into a single subject for months or years, making it our sole focus until we switch to a new area entirely. A multipotentialite’s interests can occur simultaneously (several interests at one time), sequentially (one interest at a time), or anywhere in between.

To figure out your own place on this spectrum, think about your past interests, projects, and jobs. Notice any patterns? Do you tend to be interested in many different topics at once, or do you prefer to focus intently on one thing at a time before moving on to the next one (and then the next)? How many projects do you like to have on your plate at once, and how many is too many? Perhaps your capacity for taking on projects is like a stove: You have four pots on four burners; some are boiling on high while others simmer in the back. Maybe your metaphorical stove is more like the industrial range in a restaurant, with a griddle and an infinite number of projects sizzling away. Alternatively, maybe you have a campfire that produces one glorious blaze at a time.

4 0
2 years ago
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