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n200080 [17]
3 years ago
5

The Absolute Zero Co. just issued a dividend of $3.40 per share on its common stock. The company is expected to maintain a const

ant 4.5 percent growth rate in its dividends indefinitely.
If the stock sells for $53 a share, what is the company’s cost of equity?
Business
1 answer:
salantis [7]3 years ago
4 0

Answer:

The company's cost of equity is: 11.20%

Explanation:

The company cost of equity is the discount rate at which present value of the growing perpetuity which is the stock's dividend stream will be equal to its current stock's price.

The present value of the perpetuity, in which r is the cost of equity, is: ( 3.4 x 1.045) / ( r - 0.045);

As explained above, current stock price is equal to the present value of dividend stream being discounted at cost of equity:

=>  ( 3.4 x 1.045) / ( r - 0.045) = 53 <=> r - 0.045 = 0.067 <=> r = 0.067 + 0.045 <=> r = 11.20%.

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Answer: Transnational (multinational)

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3 years ago
Lehman Corp. has two departments: Assembly and Testing. Assembly department had beginning inventory of 750 units which were 50%
algol13

Answer:

Total equivalent unit     1,425 units

Explanation:

<em>Under the first-in -first out system, to account for the units completed in a period, it is assumed that the opening inventory units are first completed and the balance represents the newly introduced.</em>

<em>Fully worked represents unit of inventory started this this period and completed this period</em>

Fully worked = completed units - opening inventory

Fully worked = 1200 -750 = 450 units

Item                        Units                                     Equivalent Units

Opening WIP         750     750×50%                     375

Fully worked          450      450× 100%                   450

Closing WIP           800       800× 75%                 <u> 600</u>

Total equivalent unit                                              <u>1,425</u>

Note the opening inventory has 50% work done last period so the balance of 50% i.e (100 - 50)  is completed this period

     

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a consumer's line or constraint shows various combinations of two products that can be purchased with a specific amount of incom
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A client's line or constraint suggests diverse mixtures of products that may be purchased with a particular amount of income Budget Line shows all the bundles/combinations of two commodities that a consumer can buy with the given income at a given set of prices.

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Various mixtures of profits assets may be used to derive this type. as instance, at the maximum precise degree, the profits sources are blended into five components: wages and salaries, self-employment income (farm and non-farm), government switch payments, investment earnings, and other profits.

Learn more about income here:

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