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Anit [1.1K]
2 years ago
14

Sweet Treats common stock is currently priced at $17.15 a share. The company just paid $1.22 per share as its annual dividend. T

he dividends have been increasing by 2.4% annually and are expected to continue doing the same. What is this firm's cost of equity?a. 9.41%b. 9.51%c. 8.47%d. 9.68%e. 9.82%
Business
1 answer:
ddd [48]2 years ago
5 0

Answer:

cost of equity =  9.68%

so correct option is d. 9.68%

Explanation:

given data

currently priced = $17.15

paid annual dividend = $1.22

dividends increasing = 2.4% annually

to find out

firm's cost of equity

solution

we get here cost of equity by apply price equation that is express as

Price = recent dividend × ( 1 + growth rate ) ÷ ( cost of equity - growth rate)   .....................1

put here value we get

$17.15 = \frac{1.22*(1+0.024)}{cost\ of\ equity - 0.024}

solve it we get

cost of equity =  9.68%

so correct option is d. 9.68%

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g The Nite Lite Factory produces two products - small lamps and desk lamps. It has two separate departments - finishing and prod
almond37 [142]

Answer:

$7.20

Explanation:

Given the following :

FINISHING department :

overhead budget = $550,000

direct labor HOURS = 500,000

PRODUCTION department :

overhead budget = $400,000

direct labor hours = 80,000

Predetermined allocation rate for finishing department :

Overhead / allocation base = ($550,000 / 500,000) = $1.10 per direct labor hour

Predetermined allocation rate for production department :

Overhead / allocation base = ($400,000 / 80,000) = $5 per direct labor hour

If the budget estimates that a desk lamp will require 2 hours of finishing and 1 hour of production:

Finishing department :

(2 × Predetermined allocation rate for finishing department)

= (2 × $1.10) = $2.20

Production :

(1 × Predetermined allocation rate for production department)

= (1 × $5). = $5

Total = ($2.20 + $5) = $7.20

3 0
3 years ago
Analyze the benefits and the problems posed by the four approaches to the implementation of resource management policies: contro
Mars2501 [29]

Answer:

Explanation: The implementation of resource management policies can be achieved through the following: control theory, machine learning, utility-based, and market-oriented method.

1. Control theory:

Benefit- it can analyse linear and non linear systems, single or multiple systems.

Problem- It is complex and requires multiple computations

2. Machine learning Theory:

Benefit- It does not sole depend on extracting information and it gives room for improvements. It performs routine and non routine tasks

Problem- It requires a complex to understand and need trained professional to operate it.

3. Utility-based method:

Benefit - It gives urgency to tasks, it gives users better satisfaction.

Problem- the tasks needs to be carried out continuously

4. Market-oriented method:

Benefit - it gives room to know and understand the market, it leads to an increased organisational performance.

Problem- requires a professional.

8 0
3 years ago
If you decide to hunt for your next job while you are still employed, you should be careful to a. Only search for jobs in other
shepuryov [24]

Answer:

D. Keep the information to yourself​.

4 0
2 years ago
Read 2 more answers
for $32.45 per share, and the firm expects its per-share dividend to be $2.35 in one year. Analysts project the firm’s growth ra
Serggg [28]

Answer:

Cost of equity will be 12.96 %

Explanation:

We have given current price of the stock = $32.45

Expected dividend D_1=$2.35 in one year

Growth rate g=5.72%=0.0572

We have to find the cost of equity

Cost of equity is given by

Cost of equity =\frac{expected\ dividend}{current\ price\ of\ the \ stock}+growth\ rate=\frac{2.35}{32.45}+0.0572=0.1296 = 12.96 %

8 0
2 years ago
On January 1, 2014, Evers Company purchased the following machine for use in its production process:
iren2701 [21]

Answer:

a) Calculate the amount of depreciation expense that Evers should record each year of its useful life under the following assumptions. Show your workings.

(1) Straight-line method

depreciable value = $180,000 - $10,000 = $170,000 / 4 = $42,500 per year (same for each year)

(2) Double declining balance method

depreciation expense year 2014 = $180,000 x 1/4 x 2 = $90,000

depreciation expense year 2015 = $90,000 x 1/4 x 2 = $45,000

depreciation expense year 2016 = $45,000 x 1/4 x 2 = $22,500

depreciation expense year 2017 = $22,500

(3) Units-of-activity method and estimates that the useful life of machine is 125,000 units. Actual usage is as follows: 2014, 45,000 units; 2015, 35,000 units; 2016, 25,000 units; 2017, 20,000 units.

depreciation expense per unit = $170,000 / 125,000 units = $1.36

depreciation expense year 2014 = $1.36 x 45,000 = $61,200

depreciation expense year 2015 = $1.36 x 35,000 = $47,600

depreciation expense year 2016 = $1.36 x 25,000 = $34,000

depreciation expense year 2017 = $1.36 x 20,000 = $27,200

b) Which method used to calculate depreciation reports the highest amount of depreciation expense in year 1?

double declining balance

The highest in year 4?

straight line method

The highest total amount over the 4-year period?

double declining balance

5 0
3 years ago
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