Answer:
c. $1,900
Explanation:
As for the information provided, we have:
Retained Earnings opening balance = $2,500
Current year loss = $200
Balance of retained earnings after this = $2,500 - $200 = $2,300
Now, dividends are provided which shall be paid from retained earnings only.
Cash dividends are the one paid in cash.
Stock dividends are the ones which are paid by issue extra shares from retained earnings.
Thus, both are deductible from retained earnings.
Therefore, closing balance of retained earnings = $2,300 - $200 - $200 = $1,900.
Answer:
Cost of equity = 19.1
%
Explanation:
Cost of equity = required rate of return + flotation cost
The Capital assets pricing model would be used to determined the required rate of return
<em>The capital asset pricing model (CAPM): relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c </em>
Using the CAPM , the required rate of return is given as follows:
E(r)= Rf +β(Rm-Rf)
E(r) - required return
β- Beta
Rm- Return on market
Rf- Risk-free rate
DATA
E(r) =? , Rf- 3%, Rm-14% , β- 1.1, flotation cost - 4%
E(r) = 3% + 1.1× (14% - 3%) = 15.1
%
Cost of equity = required rate of return + flotation cost
= 15.1
% + 4% = 19.1
%
Cost of equity = 19.1
%
Answer:
Follows are the solution to the question:
Explanation:
m = 4,
EAR = 
The successful quarter cumulative rate of interest = 8.24 \%
In Method 2 use Tool in Texas:
By Using the (ICONV) worksheet:
1)
To pick the worksheet, click ICONV 2.
2)
Its previous meaning will represent the NOM.
3)
To clear the worksheet, click [CLR WORK] 2nd
Continue as below.
Displayed keystrokes:
NOM = previous value 2nd ICONV:
NOM = 0.00 2nd CLRWORK:
8 DAYS: Name = 8.00.
EFF: DownArrow = 0.00
DownArrow: C / Y = meaning previous
4)
DOS: C / Y = 5.00 p.m.
EFF: DownArrow = 0.00
CPT: FRP = 8.24
