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oee [108]
3 years ago
5

Firm X just paid​ $5/share dividend. We expect the dividend to grow annually at a constant rate​ 3%. The current stock price is​

$100. If firm X issues new​ equity, the new shares would sell at​ $98/share and the firm also needs to pay investment banks​ $3/share flotation cost. What is the cost of retained​ earnings? g

Business
1 answer:
mariarad [96]3 years ago
4 0

Answer:

Cost of Earnings = (Dividends per share for next year ÷ Current market value of the stock) + Dividend growth rate

= 8.42 %

Explanation:

See Attachment

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If a firm enjoys economies of scale up to a certain output​ level, and cost then increases proportionally with​ output, what can
Len [333]

Answer:

D. decreases initially and then is horizontal.

Explanation:

A horizontal long run average cost curve reflects increase in cost proportionate to output, so the firm's long run average cost curve will fall initially and then become horizontal.

8 0
3 years ago
Oriole Shoes Foot Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with
Leona [35]

Answer:

No journal entries required

Explanation:

According to attorney estimation, the chances of winning the case are certain therefore no journal entry is required for adjustments since the chances of losing the case are very uncertain.

4 0
3 years ago
Nico bought 500 shares of a stock for $24.00 per share on January 1, 2013. He received a dividend of $2.50 per share at the end
klemol [59]

Answer:

22.92%

Explanation:

For computing the realized total rate of return, first we have to determine the total share price which is shown below:

Total share price = Sale price of share + dividend end of 2013 + dividend end of 2014 + dividend end of 2015

= $20 + $2.5 + $4 + $3

= $29.50

And, the purchase price is $24

So, the return would be

= Total share price - purchase price

= $29.50 - $24

= $5.50

Now the realized total rate of return would be

= Return ÷ Purchase price

= $5.50 ÷ $24

= 22.92%

This is the answer but the same is not provided in the given options

6 0
3 years ago
An architecture firm charges clients $250 per hour for their services, and they pay their architects an average of $175 per hour
erma4kov [3.2K]

Answer:

A)$135,000

Explanation:

service fee      250

average wage 175

contribution 75 this is the ammount generate per hour billed

expected hours billed for the year 10,000

hours x contribution per hour = total contribution

10,000 x 75 =                  750,000

Operating cost             <u>  (615,000)  </u>

Earnings before taxes    135,000

3 0
3 years ago
Corporation M has $40,000 of current earnings and profits and $10,000 of accumulated earnings and profit. During the year Corpor
zzz [600]

Answer:

$40,000

Explanation:

Calculation to determine What amount of capital gain income will N recognize related to this distribution

Using this formula

N Capital gain income=N stock basis- M distribution

Let plug in the formula

N Capital gain income=$100,000-$60,000

N Capital gain income=$40,000

Therefore The amount of capital gain income that N will recognize related to this distribution is $40,000

6 0
3 years ago
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