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Vadim26 [7]
3 years ago
13

Tennessee Valley Antiques would like to issue new equity shares if its cost of equity declines to 12.5 percent. The company pays

a constant annual dividend of $2.10 per share. What does the market price of the stock need to be for the firm to issue the new shares?a.$15.10b. $15.60c. $18.40d. $17.90e. $16.80
Business
1 answer:
kap26 [50]3 years ago
3 0

Answer:

Stock price will be $16.8

So option (e) is the correct option

Explanation:

We have f=given expected dividend D_1=$2.10per\ share

Required return R_e=12.50%=0.125

Growth rate = 0 % = 0.00

We have to find the stock price p_0

Stock price is given by

p_0=\frac{D_1}{R_e-g}=\frac{2.10}{0.125-0.00}=$16.8

So stock price will be $16.8

So option (e) is the correct answer

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daser333 [38]

The option of saving money that offers the most liquidity is a piggy bank. (option C)

<h3>What is liquidity?</h3>

Liquidity can be described as the ease with which an asset can easily be converted to cash. Paper currency and coins is the most liquid assets. Real estate is illiquid because it takes a long time for a real estate asset (e.g a house) to be sold and proceeds converted to cash.

Liquid assets earn less returns when compared with assets that are less liquid. This is because illiquid assets earn an illiquidity premium. An illiquidity premium compensates holders for holding an illiquid asset.

Money in a piggy bank is already in cash or coins and there is no need to convert it to cash again. Also, money in a piggybank is more accessible than the other options.

To learn more about liquidity, please check: brainly.com/question/15691477

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8 0
2 years ago
At the beginning of the year, Kimball Company had total assets of $700,000 and total liabilities of $400,000. If the total asset
svlad2 [7]

Answer:

$ 480 000

Explanation:

Assets : $700 000(@ beginning of year )

$100 000 increase (during year )

700 000+100 000=$800 000(@end of year)

Liabilities : $400 000(@ begininng of year )

$80 000 decrease (@ during of year)

400 000-80 000=$320 000 (@end of year)

Asset = Equity + Liability

Amount of owner’s equity at the end of the year (let x = owners equity)

800 000= x + 320 000

x= 800 000 - 320 000=$480 000

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3 years ago
Subscribe to my channel :))<br><br>It would mean so much<br><br>- avastories​
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3 years ago
Nike once famously claimed that they are a marketing company not a manufacturer, and thus they cannot be held responsible for th
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<u>Answer: </u>

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8 0
3 years ago
On July 1, 2020, the beginning of its fiscal year, Ridgedale County recorded gross property tax levies of $5,100,000. The county
vampirchik [111]

Answer:

Dr Taxes Receivable- Current $5,100,000

Cr Allowance for Uncollectible Current Taxes $153,000

Cr. Revenues $4,947,000

Dr Cash $4,755,000

Cr Taxes Receivable-Current $4,755,000

Dr Taxes Receivable-Delinquent $345,000

Dr Allowance for Uncollectible Current Taxes $153,000

Cr Taxes Receivable-Current $345,000

Cr Allowance for Uncollectible Delinquent Taxes $153,000

(3%*$5,100,000)

Dr Interest & Penalties on Delinquent Taxes $15,400

Cr Allowance for Uncollectible Interest and Penalties $2,150

Cr Revenues $13,250

Dr Cash $63,200

Cr Taxes Receivable-Delinquent $57,500

Cr Interest & Penalties Receivable on Taxes $5,700

Explanation:

Preparation of the journal entries to Record entries for the transactions as stated and to Prepare the journal entries to record the tax levy on July 1, 2020, in the General Fund

Dr Taxes Receivable- Current $5,100,000

Cr Allowance for Uncollectible Current Taxes $153,000

(3%*$5,100,000)

Cr Revenues $4,947,000

($5,100,000-$153,000)

Dr Cash $4,755,000

Cr Taxes Receivable-Current $4,755,000

Dr Taxes Receivable-Delinquent $345,000

$5,100,000-$4,755,000)

Dr Allowance for Uncollectible Current Taxes $153,000

(3%*$5,100,000)

Cr Taxes Receivable-Current $345,000

Cr Allowance for Uncollectible Delinquent Taxes $153,000

(3%*$5,100,000)

Dr Interest & Penalties on Delinquent Taxes $15,400

Cr Allowance for Uncollectible Interest and Penalties $2,150

($15,400-$13,250)

Cr Revenues $13,250

Dr Cash $63,200

( $57,500+$5,700)

Cr Taxes Receivable--Delinquent $57,500

Cr Interest & Penalties Receivable on Taxes $5,700

7 0
2 years ago
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