Answer:
7.83%
Explanation:
This is calculated by using the Gordon growth model (GGM) formula as follows: P = d / (r - g) ……………………………………… (1)
Where;
P = market price of the stock = $24.09
d = next year annual dividend = $1.26 r = cost of equity = ?
g = dividend growth rate = 2.6%, or 0.026
Substituting the values into equation and solve for r, we have:
24.09 = 1.26 / (r - 0.026)
24.09 (r - 0.026) = 1.26
24.09r - 0.62634 = 1.26
24.09r = 1.26 + 0.62634
24.09r = 1.88634
r = 1.88634 / 24.09
r = 0.0783038605230386, or 7.83038605230386%
Rounding to 2 decimal places. we have:
r = 7.83%
Therefore, the correct option is 7.83 percent.
Answer:
The "compose" or "draft" option allows you to type a new message.
Answer:
Woods Company
Accounts Requiring Adjustment, Type of Adjusting Entry, and the Related Account:
Account Type of Adjustment Related Account
a) Account receivable Accrued revenue Service revenue
b) Prepaid insurance Prepaid expense Insurance expense
c) Equipment Not required Not required
d) Accumulated depreciation Accrued expense Depreciation expense
e) Notes Payable Not required Not required
f) Interest Payable Accrued expense Interest expense
g) Unearned service revenue Unearned revenue Service revenue
Explanation:
End of period adjustments are made to accounts in order to bring them in line with the accrual concept and matching principle of accounting. These principles require that expenses and revenues for the period are matched in order to determine the appropriate profit generated for the period. The implication is that transactions are recorded when they are incurred and not when cash is exchanged. For example, if rent expense is incurred for the year and payment is made in the following year, the expense must be recognized in the current year. The same applies to revenue.
Answer:
The correct answer is
A) An exchange of a long position in a fixed-rate bond for a short position in a floating-rate note.
Explanation:
Swapping a fixed interest for a floating one can occur if the fixed interest tenure in comparison to a floating exchange rate becomes less expensive for the entity who took the loan.
Also executing a swap in interest rates (that is giving up the fixed tenure for the floating tenure) helps to ensure that liabilities are kept at minimum whilst assets are maximised.
It is important to note that the capital remains unmodified.
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