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
yawa3891 [41]
3 years ago
14

Assume that Kish Inc. hired you as a consultant to help estimate its cost of common equity. You have obtained the following data

: D0 = $0.90; P0 = $27.50; and g = 7.00% (constant). Based on the DCF approach, what is the cost of common from retained earnings?
Business
1 answer:
lisov135 [29]3 years ago
4 0

Answer:

10.5%

Explanation:

the complete formula for calculating the intrinsic value of a stock with a growing perpetuity is:

stock price₀ = dividend₁ / (cost of equity - growth rate)

stock price₀ = $27.50

dividend₁ = dividend₀ x (1 + growth rate) = $0.90 x 1.07 = $0.963

growth rate = 7%

$27.50 = $0.963 / (cost of equity - 7%)

cost of equity - 7% = $0.963 / $27.50

cost of equity - 7% = 3.5%

cost of equity = 10.5%

You might be interested in
Imagine that before black diamond initiated its greenfield venture in zhouhai, china, peter and wim asked for your advice. what
Nadya [2.5K]
<span>A green field investment or venture is a foreign direct investment known as FDI. If a company decides to go the FDI route, they are building their operations within a foreign country from start to finish. They will often build many distribution warehouses, offices and living areas for their workers that go to the foreign country to work or those within the foreign country working for the parent company. </span>
7 0
3 years ago
Read 2 more answers
Answer the following statement true (T) or false (F):
grin007 [14]

Answer:

TRUE

Explanation:

As Cherry Doux Bakery reaches an agreement with Candy Call to use Candy Call's original dark chocolate in its popular chocolate cookies and sell them in its stores. The two companies are using a strategy known as co-branding. Co-branding is a marketing technique where two brands pool their resources and share advertisement, technology, risks and sell their products/services together which is quite helpful for the both brands. For example, when Dell use intel processors and advertise it in its ads, it is a perfect example of co-branding. Co-branding is help and effective for both of the organization. One company can leverage its products and this sales with the help of another company. In this strategy, strategic alliance between both brands can get stronger hold in the market with more and enhanced brand awareness as well.

3 0
3 years ago
Which of the following is an essential element of a valid real estate contract?
Svetlanka [38]

Answer:

Legal purpose

Explanation:

The contract is approved when there is an agreement and agreement should be enforced i.e.

Agreement + enforceability = contract

Now the element of the contract that become the contract to be valid is the legal purpose that means the contract that should be made should be legal in the court point of view i.e. feasible

Therefore the second option is correct

8 0
3 years ago
State the puropse of liabilities​
Delicious77 [7]
Liabilities are a vital aspect of a company because they are used to finance operations and pay for large expansions. They can also make transactions between businesses more efficient.
8 0
3 years ago
Am I correct? if not lmk the answer please​
Vlad [161]
A focus group is a common qualitative research technique used by companies for marketing purposes. It typically consists of a small number of participants, usually about six to 12, from within a company's target market. So yes your right
4 0
3 years ago
Other questions:
  • Select the correct words to complete the statements about two different information sources for consumers.
    15·2 answers
  • What is the theoretical justification of the allowance method as contrasted with the direct write-off method of accounting for b
    15·1 answer
  • Define the limits of the principle of commonality in regards to individuals, government, and corporations.
    6·1 answer
  • Each sole proprietor that applies for initial registration in a State as either a broker-dealer or investment adviser must file:
    10·1 answer
  • A predetermined manufacturing overhead rate is calculated in the same manner as an actual manufacturing overhead rate except tha
    5·1 answer
  • Lucian is a recent college graduate and is relatively new at your firm. He has been asked to write a report on a customer site v
    14·1 answer
  • Select the correct answer. Which utility applies to a company that educates customers about its products' features? OA form util
    5·1 answer
  • If you want to melt a rock, even partially, there are three methods you can employ. Which of the following is not a way that mel
    15·1 answer
  • Chadmark Corporation's budgeted monthly sales are $3,000. The company sells on credit with terms of 2/10 net 45. Forty (40) perc
    9·1 answer
  • from the following list, identify those that are likely to serve as source documents. (you may select more than one answer. sing
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!