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sergiy2304 [10]
2 years ago
6

Tim's Tools just issued a dividend of $2.22 per share on its common stock. The company is expected to maintain a constant 2.8 pe

rcent growth rate in its dividends indefinitely. If the stock sells for $19 a share, what is the company's cost of equity?
Business
1 answer:
LekaFEV [45]2 years ago
4 0

Answer:

expected return = 12.03%

Explanation:

using the dividends growth model we can calculate the required return

\frac{divends}{return-growth} = Intrinsic \: Value

2.22 x 1.03 = 2.2866

We must remember that the gordel model is used with next year dividends

2.2866(return - 0.023) = 19

2.2866/19      +0.023 = return

return = 12.03%

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4 0
3 years ago
Give the formulas for and plot average fixed​ cost, AFC, marginal​ cost, MC, average variable​ cost, AVC, and average​ cost, AC,
zloy xaker [14]

Answer:

AFC = \frac{TFC}{q}

MC = \frac{d}{dq} TC

AVC = \frac{TVC}{q}

AC =  \frac{TC}{q}

Explanation:

The cost function is given as C=9+q^{2}.

The fixed cost here is 9, it will not be affected by the level of output.

The variable cost is q^{2}.

AFC = \frac{9}{q}

MC = \frac{d}{dq} TC

MC = \frac{d}{dq} C=9+q^{2}

MC = 2q

AVC = \frac{TVC}{q}

AVC = \frac{q^2}{q}

AVC = q

AC =  \frac{TC}{q}

AC =  \frac{[tex]C=9+q^{2}}{q}[/tex]

AC = \frac{9}{q} +q

3 0
3 years ago
Cedar Designs​ Company, a custom cabinet manufacturing​ company, is setting standard costs for one of its products. The main mat
Snowcat [4.5K]

Answer:

Standard direct labour cost = $20.00   per hour

Explanation:

The direct labour costs represent expenditures incurred in respect of direct worker which can be traced to the product been produced. For example, the labour cost of machine operator saddled with production task.

The payroll cost is not a direct labour cost because payroll employed are not direct workers, also benefits are overheads related to direct workers

Standard direct labour cost = $20.00

5 0
2 years ago
The price elasticity of demand measures the: A. responsiveness of quantity demanded to a change in quantity supplied. B. respons
pickupchik [31]

Answer:

Option "B" is the correct answer to the following statement.

Explanation:

The price elasticity of demand determines the flexibility of the volume needed to adjust the price.

The demand of an individual or market becomes inelastic if it will not adjust much to increasing prices, and it is elastic for an individual or market if the demand of a particular commodity will shift a lot as prices shift.

6 0
3 years ago
A withdrawal of cash from a bank that does not put the bank's reserves below the level of required reserves will ______.
Svetach [21]

If there is a withdrawal of cash from a bank which does not go below the required reserves, the withdrawal will not change money supply but will reduce bank checkable deposits.

<h3>What does withdrawing from a bank do?</h3>

If one withdraws money from a bank, it will reduce the bank's checkable deposits as these are made of cash that was deposited by entities.

As regards total money supply however, these withdrawals will only have an impact if the withdrawal causes bank reserves to fall below the required reserves.

Find out more on required reserves at brainly.com/question/10684321.

4 0
2 years ago
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