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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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Calvert Corporation expects an EBIT of $23,300 every year forever. The company currently has no debt, and its cost of equity is
Gnesinka [82]

Answer:

Missing <em>"b-1. What will the value of the firm be if the company takes on debt equal to 50 percent of its unlevered value?  b-2. What will the value of the firm be if the company takes on debt equal to 100 percent of its unlevered value?"</em>

a. Current value of the company = EBIT*(1-t) / Ke

Current value of the company = $23,300*(1-0.25) / 0.143

Current value of the company = $23,300*0.75 / 0.143

Current value of the company = $17,475 / 0.143

Current value of the company = $122202.7972027972

Current value of the company = $122,202.80

So, the current value of the company is $122,202.80.

bi. Value of the company = $122,202.80 + (0.25*$122,202.80*0.5)

Value of the company = $122,202.80 + $15,275.35

Value of the company = $137,478.15

bii Value of the company = $122,202.80 + (0.25*$122,202.80*1)

Value of the company = $122,202.80 + $30,550.7

Value of the company = $152,753.5

7 0
2 years ago
The ultimate goal of JIT is to have:__________.
sineoko [7]

Answer:

The correct answer is (A)

Explanation:

JIT stands for just in time; it is a process which is used to handle and coordinate the inventory management.  The main goal is to handle the inventory efficiently to improve the flow of the system in a timely manner and to eliminate discrepancies in the inventory management system. Overall, it helps to eliminate the disruption and to make the system flexible and smooth.

8 0
3 years ago
Compare and contrast John Keats’s “To Autumn” and Susan Hartley Swett’s “July.” In your response, make sure you include the answ
Vera_Pavlovna [14]
The principle is the loan amount so it would be $1,000.
Hope it helps!
6 0
2 years ago
Why are only final goods and services included in the calculation of GDP?
zavuch27 [327]

Answer:

Only final goods and services are included in the calculation of GDP to avoid counting things multiple times.

Explanation:

In the calculation of the GDP only final goods and services are included because the prices of the these already have the costs of all the things that were used to produce them. If we count the intermediate products and services that were used for the final output, we will be double counting which will give a result that is not a correct estimation.

5 0
2 years ago
Sam is getting his bachelor's degree. During some of his course work, he honed his research skills and learned to exhibit confid
xz_007 [3.2K]

Answer:

Im pretty sure its Preforming arts

Explanation:

cuz i said

3 0
3 years ago
Read 2 more answers
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