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son4ous [18]
3 years ago
14

Gremlin Industries will pay a dividend of $ 1.55 per share this year. It is expected that this dividend will grow by 7​% per yea

r each year in the future. The current price of​ Gremlin's stock is $ 22.10 per share. What is​ Gremlin's equity cost of​ capital?
Business
2 answers:
sasho [114]3 years ago
3 0

Answer: 14%

Explanation:

We can calculate this using the Gordon Growth Model which looks like this,

P = D1 / r - g

P is the current stock price

D1 is the next dividend

r is the rate of return or the cost of capital

g is the growth rate.

We have all those figures except the cost of capital so making r the subject of the formula we can solve for it. Doing that will make the formula,

r = D/ P + g

r = 1.55 / 22.10 + 0.07

r = 0.1401

r = 14%

14% is the equity cost of capital.

If you need any clarification do react or comment.

andrezito [222]3 years ago
3 0

Answer:

Cost of capital for Gremlins is 14.01%

Explanation:

The DDM is used to value a stock by discounting the future dividends with the required return hence it will be used to calculate the required return / cost of equity

SP = D1/ r- g

SP $22.10, D1 $1.55, g 7% plug in the values

22.10 = 1.55/ r - 0.07

22.10 (r- 0.07) =1.55

22.10 (r- 0.07)/22.10 =1.55/22.10

r - 0.07 = 1.55/2.10

r = 1.55/22.10 +0.07

  =0.1401

   =14.01%

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In the month of November Marigold Corp. wrote checks in the amount of $43300. In December, checks in the amount of $59239 were w
yanalaym [24]

Answer:

$11,977

Explanation:

The difference between the balance of the total checks written and balance of the total checks presented for withdrawal gives the amount outstanding.

As such, amount of outstanding checks at the end of December is the net of the balance of the checks written in November and December and the balance of the checks presented in the same period.

This is

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4 0
3 years ago
Read 2 more answers
Garland Company received proceeds of $235000 on 10-year, 6% bonds issued on January 1, 2018. The bonds had a face value of $2500
Lerok [7]

Answer:

$238000

Explanation:

The computation of the carrying value of the bond is shown below:

Given that

Face Value of Bonds = $250,000

Proceeds from issuance of bonds = $235,000

Before that we need to compute the following things

Now

Discount on Bonds Payable = Face Value of Bonds - Proceeds from issuance of bonds

= $250,000 - $235,000

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Life of Bonds = 10 years

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Discount on Bonds amortized annually = Discount on Bonds Payable ÷ Life of Bonds

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5 0
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jarptica [38.1K]

Answer:

Hope it helps

Mark my answer brainliest

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Answer:

A)

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C)

More American goods should be exported to the UK, and less British goods should be imported to the US. Since the US dollar should be cheaper, American products are cheaper. The opposite will happen to British products.

7 0
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Understanding opportunity cost before you started applying for college, a job recruiter offered you a full-time cashier position
natta225 [31]

Answer: You decide to go to college probably because<em><u>"You value a year of college at more than $56,000"</u></em>

<em><u>Opportunity costs are the benefits an respective individual, leaves while determining to pick one alternative over another. </u></em>

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3 0
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