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
Dahasolnce [82]
2 years ago
9

Assume Evco, Inc., has a current price of $50 and will pay a $2 dividend in one year, and its equity cost of capital is 15%. Wha

t price must you expect it to sell for right after paying the dividend in one year in order to justify its current price
Business
1 answer:
gtnhenbr [62]2 years ago
6 0

Answer:

The expected price after 1 year would be$55.5

Explanation:

According to the given data,

Price of the stock (Po) = $50

Dividend after 1year (D1) = $2

Equity cost of capital (KE) =15%

The formula for calculating the price after 1 year i.e.,(P1 ) is

                         

                          Po = (D1 + P1 )/ 1+KE                                      $50= ($2 + P1) / (1+0.15)

                        P1 = [$50(1.15)] - $2 = $55.5

You might be interested in
Mccabe Corporation uses the weighted-average method in its process costing. The following data pertain to its Assembly Departmen
Gemiola [76]

Answer and Explanation:

The computation of the equivalent units of production for both materials and conversion costs is given below:

For material

= Units completed + ending work in process × completion percentage

= 7,700 + 2,100 × 0.75

= 9,275 units

And, for conversion cost

= Units completed + ending work in process × completion percentage

= 7,700 + 2,100 × 0.25

= 8,225 units

5 0
2 years ago
Carlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of $18,500 per year. An
Ahat [919]

Answer:

equivalent annual cost: 19,784.81

The investment is not economically justified as it is cheaper to pay the fines than invest in the equipment to avoid them.

Explanation:

We calcualte the PMT of a 75,000 dollars equipment at 10%

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV 75,000

time 5

rate 0.1

75000 \div \frac{1-(1+0.1)^{-5} }{0.1} = C\\

C                 $ 19,784.811

EPA fines:    <u>   </u><u>$ 18,500.00  </u>

differential:          (1, 284.81)

3 0
3 years ago
Which best explains how the law of demand affects consumers?
yuradex [85]
It helps tell producers when a price is too high
6 0
3 years ago
Value stocks usually exhibit ______ price-to-book ratios and ______ price-to-earnings ratios.A. low; lowB. low; highC. high; low
AysviL [449]

Answer:

A. low; low

Explanation:

Value stocks usually exhibit low price-to-book ratios and low price-to-earnings ratios

3 0
2 years ago
The economic development of a country is dependent on all of the following except Part 2 A. improving education. B. limiting pro
Stolb23 [73]

The economic development of a country is dependent on all of the following except promoting protectionist barriers. Hence, option D is correct.

What is Economic Development?

  • Economic and social development is the process through which the economic well-being and quality of life of a country, region, local community, or an individual are enhanced in accordance with specific aims and objectives, according to the economics study of the public sector.
  • Although the phrase has been widely used in the 20th and 21st centuries, the idea has been around in the West for much longer.
  • The terms "Westernization," "industrialization," and "modernization" are also frequently used when referring to economic progress. Prior to the 1960s, economic development programs tended to place more of an emphasis on infrastructure and industrialization than on reducing poverty.

Know more about Economic Development brainly.com/question/22690298

#SPJ4

5 0
1 year ago
Other questions:
  • A store manager predicts that 80 hats will be sold if each hat costs $15. The manager predicts that 3 less hats will be sold for
    15·1 answer
  • ________ is the extortion of income or resources of property holders by public officials such as politicians and government bure
    14·1 answer
  • _____ _____ is a way to see if your product is meeting the needs of your customers.
    12·1 answer
  • Green Corp. owns 30% of the outstanding common stock and 100% of the outstanding noncumulative nonvoting preferred stock of Axel
    14·1 answer
  • There is a 4 percent error rate at a specific point in the production process. If an inspector is placed at this point, all the
    5·1 answer
  • The purchase of common stock gives the holder (a) rights to residual cash flows (b) access to monthly Board of Director’s meetin
    13·2 answers
  • Fill in the following table by calculating the official unemployment rate and the U-4 measure of labor underutilization.
    6·1 answer
  • "A customer places an order to sell 100 shares of ABC at the market. The initial execution report shows the trade occurring at $
    12·1 answer
  • As a result of an increase in the growth rate of the money supply: __________
    12·1 answer
  • Help help help help help help
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!