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Ne4ueva [31]
2 years ago
10

Praetorian Industries will pay a dividend of $2.50 per share this year and has an equity cost ofcapital of 8%. Praetorianʹs stoc

k is currently trading at $84 per share. By comparing Praetorianwith similar firms, an investor expects that its dividends will grow by up to 5% per year. Whatis the best next step that the investor should take regarding Praetorianʹs stock?A) Sell any Praetorian stock that she owns.B) Short Praetorianʹs stock.C) Revise Praetorianʹs equity cost of capital.D) Revise her estimate of Praetorianʹs dividend growth
Business
1 answer:
Alenkinab [10]2 years ago
6 0

Answer:

The best next step that the investor should take regarding Praetorianʹs stock is C. Revise her estimate of Praetorian's Dividend Growth

Explanation:

Consider the following calculations

Price = D (1+g)/ (r-g) = 2.5*(1.05)/(0.08-0.05) = $ 87.5

Hence, the stock is underpriced at $ 84 per share .

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An educational institution that sells shares to investors to make money
rodikova [14]

Incomplete question. Hence, In answered from a general economic perspective.

Answer:

<u>is having an IPO</u>

Explanation:

Of course, an IPO (Initial Public Offering) is one method that can be used to make/raise money by a business. Usually, the institution places its shares of stocks open for sale to investors.

Therefore, we can infer from the above statement that the educational institution was formerly privately owned, but since it started to sell its shares to investors so as to make money, it is having an IPO.

7 0
3 years ago
One factor that influences the consumer decision-making process is __________, which refers to the set of values, attitudes, and
Ray Of Light [21]

Answer:

culture

Explanation:

culture: it is combination of values and moral that someone inherit from their forefather. it has very firm effects on decision making process. culture factors like occupation, economic background of consumer and lifestyle etc affect the decision of consumer. it is the value that passes from one generation to another.

culture is that stiff part of one life that cannot be change with time and more or less on the basis this consumer change its decision.

6 0
3 years ago
If a frozen pizza plant is the cost object, classify each of the following costs as direct or indirect, respectively: property i
emmainna [20.7K]

Answer:

Indirect

Direct

Iindirect

Explanation:

Direct cost is the cost that can be traced back to the cost object whereas the indirect cost cannot be traced back. Cost object is something to which the costs are assigned. in this case the cafeteria workers are directly working with the cost object:Frozen pizza plant, hence the cost is directly associated with that. Janitorial supplies and property insurance cost does not directly relate to The cost object given here so it will be classified as indirect cost.

3 0
2 years ago
You pay $5,500 per year for insurance on your building. Fire damage caused $15,000 in repairs. The insurance company paid for th
ElenaW [278]

Based on the amount you pay now and the increase in insurance premiums, your annual insurance costs next year would be $6,325.

<h3>What is the next insurance cost next year?</h3>

The annual cost of insurance refers to the amount that is paid in premiums in a year.

That cost is currently $5,500 but will increase by 15%.

= Current insurance cost x ( 1 + rate of increase)

Solving gives:

= 5,500 x ( 1 + 15%)

= $6,325

Find out more on insurance cost at brainly.com/question/4953989.

6 0
2 years ago
On January 1, Duffy Enterprises issued $100,000 in bonds that mature in 10 years. The bonds were issued at face value. The bonds
Salsk061 [2.6K]

Answer:

Given that,

Value of bonds issued = $100,000

Maturity period = 10 years

Bonds were issued at face value.

Interest rate = 8%

Interest is paid once per year on December 31.

Since, the bonds are issued at the face value, so there would be no premium or discount on the issue of bonds.

The cash is received by the company for issuing bonds and it is debited. We know that  bonds are a part of liabilities, so they are credited

Therefore, the journal entry is as follows:

Cash A/c Dr. $100,000

     To bonds payable      $100,000

(To record the issuance of bonds)

7 0
3 years ago
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