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loris [4]
3 years ago
14

Company B is expected to pay a dividend of $2 per share at the end of year 1 and the dividends are expected to grow at a constan

t rate of 4 percent forever. If the current price of the stock is $20 per share, calculate the expected return (i.e., the cost of equity capital for the firm)
Business
1 answer:
4vir4ik [10]3 years ago
6 0

Answer:

The answer is 14%

Explanation:

This will be solved by Dividend discount model based approach

re = D1/Po + g

where re is the rate of return

D1 is expected dividend($2)

Po is the current market value of equity($20)

g is the expected growth rate of dividend(4% or 0.04)

2/20 + 0.04

0.1 + 0.04

= 0.14

Expressed as a percentage is

0.14 x 100

14%

Therefore, the expected return is 14%

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A company started the year with "$185,000 of goods finished" and ready for sale. During the year, a total of $700,000 of goods w
gulaghasi [49]

Answer:

$110,000

Explanation:

The closing balance in the finished goods inventory account is a function of the opening balance and the net movement that occurred during the year.

As such, the closing balance

= opening balance + purchases/production - sales

Given;

opening balance = $185,000

purchases/production = $550,000

sales = $625,000

Therefore,

closing balance in the finished goods = $185,000 + $550,000 - $625,000

= $110,000

6 0
3 years ago
What do u mean by equipment ?​
miss Akunina [59]

Explanation:

1a : the set of articles or physical resources serving to equip a person or thing: such as. (1) : the implements used in an operation or activity : apparatus sports equipment. (2) : all the fixed assets other than land and buildings of a business enterprise. (3) : the rolling stock of a railway.

6 0
3 years ago
Read 2 more answers
Item 5At the end of the day, the cash register's record shows $2,050, but the count of cash in the cash register is $2,058. The
liraira [26]

Answer:

Debit Cash $2,058; credit Cash Over and Short $8; credit Sales $2,050

Explanation:

The journal entry is shown below:

Cash Dr $2,058

  To cash over and short $8

  To sales $2,050

(Being the cash sales is recorded)

Here the cash is debited as it increased the assets and sales is credited as it increased the revenue and the difference is credited to the cash over and short

7 0
3 years ago
"Suppose that the equilibrium market wage for a widget maker is $10/hour. A perfectly competitive firm hires its profit maximizi
larisa [96]

Answer:

marginal product of labor = 5 widgets per hour

Explanation:

In order to maximize profits, the firm must produce the output quantity where marginal revenue = marginal cost. In this case, the marginal revenue is $2, so the marginal cost must also be $2.

If hiring the last widget maker costs $10 per hour, and the marginal cost per widget is $2, then the worker must be able to produce 5 widgets.

5 0
3 years ago
If a company incurs $2,000 of factory rent, $1,000 of factory utilities, and $5,000 of miscellaneous factory costs, the journal
slamgirl [31]

Based on the costs incurred by the company such as factory rent, factory utilities, and miscellaneous factory costs, the journal entry would be a debit to <u>Manufacturing Overhead. </u>

<h3>What are factory costs debited to?</h3>

When costs are incurred in a factory or production plant, their classification would depend on whether they were directly related to production or not.

Costs like factory rent, utilities and miscellaneous factory costs, are not directly related and so are classified as Manufacturing overhead which is the account they will be debited to.

Find out more on manufacturing overhead at brainly.com/question/13312583

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3 0
2 years ago
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