1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Anit [1.1K]
3 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]3 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%

You might be interested in
1. Characteristics of oligopoly An oligopolistic market structure is distinguished by several characteristics, one of which is m
sergejj [24]

Answer:

----Either similar or identical products --------Difficult entry

----Mutual interdependence

Explanation: An Oligopolistic market is a market characterized by few sellers of large firms who sell either similar or differentiated products. Here, Each firm is mutually interdependent as any action from any firms influences the actions of the rest of the competing firms , therefore decisions are made using strategic planning and consideration as competing firms are ready to counter react to any change in any new market action.

Market entry is difficult Because of the already established customer base of the successful operating firms dominating the market.Also venturing into the market requires high capital, technology or additional government licences. Examples of Oligopolistic firms are oil and gas firms, airlines, mass media etc

8 0
3 years ago
Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash p
cricket20 [7]

Answer:

Explanation:

                          Monthly Cash budget for January - March

Particulars                 January     February         March

Opening  balance     30,000       30,000         69,294

Cash received          525,000     400,000       450,000

Total                          555,000     430,000       519,294

Cash payment          (475,000)     (350,000)    (525,000)

Interest (60000*1%)   (600)    10600*1%(106)         0

                                  79,400        79,894            (5,706)

Loan repayment        (49,400)      (10,600)          35,706

Minimum cash balance of 30,000 required.

(79,400-30,000)  

(60,000-49,400)                    

Cash balance            30,000          69,294           30,000

Loan repayment.

January

Opening balance  60,000

Repayment            (49,400)

balance                   10,600

February

Opening balance     10,600

repayment(balance)  (10,600)

March

35,706

7 0
3 years ago
Li Chang handles the production department of a company that sells shoes. He has to discuss the shoe production targets for the
castortr0y [4]
I believe your answer is B
5 0
3 years ago
Read 2 more answers
You are in the process of getting a new car but are not sure if you should buy or lease. The price of the car you want is $18,00
Mnenie [13.5K]

Answer:

You should buy the car.

Explanation:

Note: See the attached excel file for the worksheet that shows calculations of the present values of the Lease and Buy Options.

In the attached excel file, we have:

Net present value of Lease Option = $3,654.01

Total present value of Buy Option = $4,135.47

Difference = Total present value of Buy Option - Present value of Lease Option = $481.46

The Difference above shows that the total present value of Buy Option is greater than the net present value of Lease Option by $481.46.

Since the total present value of Buy Option of $4,135.47 is greater than the net present value of Lease Option of $3,654.01, you should buy the car.

Download xlsx
8 0
3 years ago
HELP PLEASE:)
Sonbull [250]

I Think its answer C: Fixed and Variable rates

3 0
3 years ago
Other questions:
  • A salesperson who calls phone numbers from a purchased list of new parents and asks, "Have you been considering the purchase of
    8·1 answer
  • The federal trade commission (ftc) created the _____ rule, giving consumers three days to cancel purchases they make from salesp
    5·1 answer
  • Maria and Jon Sanchez have just completed their third annual set of financial statements. They met in a personal finance class a
    12·1 answer
  • When a tax is imposed on a good for which the supply is relatively elastic and the demand is relatively inelastic,
    9·1 answer
  • Sony introduces a new compact music player to compete with Apple's iPod that carries a two-year warranty against manufacturer's
    12·1 answer
  • Which of the following is NOT one of the appeals of diversifying into unrelated businesses?
    6·1 answer
  • How would a decrease in u.s. capital investment by peruvians impact the supply of the peruvian sol and the u.s. dollar price of
    7·1 answer
  • MECCS Inc. stock paid its annual dividends of $4.90 per share yesterday. The dividend is expected to decrease at a constant rate
    11·1 answer
  • Lucy is preparing to invest in a new online franchise, Notable Moments. The franchisor provides the exclusive software and train
    8·1 answer
  • Chemical manufacturer DuPont has approximately $0.68 in assets for every dollar in sales. According to asset intensity, for ever
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!