Answer:
a. Cost of Equity is 4.50%
b. Cost of Equity is 15.55%
Explanation:
a.
The formula for price of a stock using the constant growth model of the DDM approach is,
P0 = D0 * (1+g) / r - g
Plugging in the available values,
62 = 0.3 * (1+0.04) / (r - 0.04)
62 * (r - 0.04) = 0.312
62r - 2.48 = 0.312
62r = 0.312 + 2.48
r = 2.792 / 62
r = 0.045 or 4.5%
b.
SML (r) = rRF + β * (rM - rRF)
Plugging in the values,
r = 0.045 + 1.3 * ( 0.13 - 0.045)
r = 0.1555 or 15.55%
Are u sure everthing is here
Head and tails is a game that only gives a 50/50 chance so if it lands on tails it could land on head and repeat but it always very so nothing is so sure my answer is 50/50 chance
<span>This prompt is one I do not agree with. I would think, and probably bet money on, that an athlete's performance improving from performance compliments by his coach than his getting a new uniform. Verbal compliments that highlight strong aspects of one's performance is a bigger boost than a new set of clothes.</span>
Answer:
$17,600 ; $29,000
Explanation:
The computation of the net income is shown below:
Based on Cash basis
= Received cash - Expenses incurred in cash - prepaid expenses
= $56,000 - $26,900 - $11,500
= $17,600
Based on Accrual basis
= Revenue earned - expenses incurred
= $64,000 - $35,000
= $29,000
The cash expenses incurred is
= $35,000 - $8,100
= $26,900
