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Rina8888 [55]
3 years ago
9

IBM expects to pay a dividend of $6 next year and expects these dividends to grow at 4% a year for the foreseeable future. The p

rice of IBM is $110 per share. What is IBM's cost of equity capital
Business
1 answer:
jolli1 [7]3 years ago
4 0

Answer:

9.45%

Explanation:

Data provided in the question

Current year dividend = $6

Expected growth rate = 4%

Price of the IBM = $110

The computation of the cost of equity capital is shown below:

Cost of equity capital = Current year dividend ÷ price + Growth rate

                                    = $6 ÷ $110 + 4%

                                    = 9.45%

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Truman applies for a job at Skylight Canopy Corporation for which he is well qualified, but for which he is rejected. Skylight c
Blizzard [7]

Answer:

The correct answer is:  a protected class.

Explanation:

A protected class is a group of people legally protected from employment discrimination who share similar characteristics such as <em>religion, race, gender, age </em>or<em> disability</em>. The United States Department of Justice is the agency in charge of enforcing this type of anti-discriminatory law.

4 0
3 years ago
In comparison to the buying pattern of final consumers, the purchasing behavior of organizational buyers is
Jet001 [13]

Answer:

first and foremost influenced by the economic needs that they have for quality and reliability.

Explanation:

Based on the information provided within the question it can be said that the the purchasing behavior of organizational buyers is first and foremost influenced by the economic needs that they have for quality and reliability. Since consumers want to purchase a product they can trust that will not fail after purchase and will get the job that it is suppose to do, done.

3 0
3 years ago
Read 2 more answers
Strickland Company owes $202,900 plus $18,600 of accrued interest to Moran State Bank. The debt is a 10-year, 10% note. During 2
Vesnalui [34]

Answer:

a.                     Strickland Company (Debtor)

Date  Account Title and Calculation                   Debit         Credit

          Notes payable                                          $202,900

          Interest payable                                        $18,600

          Accumulated depreciation (Machine)      $218,689

                    Machine                                                             $397,600

                    Gain on disposition of machine                        $7,080

                     (186,000 + 397,000 - 218,680)

                    Gain on debt restructuring                                 $35,500

                    [(202,900 + 18,600) - 186,000]

                       Moran State Bank (Creditor)

Date  Account Title and Calculation          Debit         Credit

         Machine                                             $186,000

         Allowance for Doubtful accounts     $35,000

                Notes receivable                                           $202,900

                 Interest receivable                                        $18,600

b. Gain on machine disposition and the gain on debt restructuring should be reported as an ordinary gain in the income statement.

c.                      Strickland Company (Debtor)

Date  Account Title and explanation         Debit         Credit

         Notes payable                                   $202,900

         Interest payable                                 $18,600

                  Common stock                                             $112,000

                   Additional paid-in-capital                            $74,000

                   Gain on debt restructuring                          $35,500

                       Moran State Bank (Creditor)

Date  Account Title and explanation             Debit         Credit

          Investment Trading                             $186,000

           Allowance for Doubtful accounts      $35,500

                     Notes receivable                                          $202,900

                     Interest receivable                                        $18,600

7 0
3 years ago
Consider the following two mutually exclusive projects:Year Cash Flow (X) Cash Flow (Y)0 ?$16,400 ?$16,400 1 6,660 7,190 2 7,240
pickupchik [31]

Answer:

1a. 7.12%

b. 6.99%

2. 9.69%

Explanation:

The IRR is the discount rate that equates the after tax cash flows from an investment to the amount invested.

The IRR can be calculated using a financial calculator.

The IRR for project X :

Cash flow in year 0 = $-16,400

Cash flow in year 1 = $6,660

Cash flow in year 2 = $7240

Cash flow in year 3= $4760

IRR = 7.12%

The IRR for project Y :

Cash flow in year 0 = $-16,400

Cash flow in year 1 = $7,190

Cash flow in year 2 = $7,780

Cash flow in year 3 = $3530

IRR = 6.99%

The cross over rate is the rate that equates the cash flow from both projects.

The first step is to subtract the cash flow from project Y from the cash flow of project X

Cash flow for year 0 = $16400 - $16400 = 0

Cash flow for year 1 = $6,660 - $7,190 = $-530

Cash flow for year 2 =$7,240 -$7,780 =$-540

Cash flow for year 3 = $4,760 - $3,530 = $1230

The next step is to find the discount rate using a financial calculator.

Cash flow for year zero = 0

Cash flow for year one = $-530

Cash flow for year 2 =$-540

Cash flow for year 3 =$1230

Cross over rate = 9.69%

I hope my answer helps you

6 0
3 years ago
Stone Company has beginning equity of $1,200,000, net income of $200,000, dividends of $120,000 and investments by owners in exc
meriva

Answer:

The correct answer is D. $1,320,000 .

Explanation:

In this case, it should be considered that the Stone Company is just beginning to operate, so the capital at the end of the period is made up of the following:

Initial Capital: $ 1,200,000

Dividends: $ 120,000

TOTAL = $ 1,320,000

Net income is not part of the measurement of capital, since information on expenses must be available to calculate the profit or loss for the period. For its part, investments in shares are considered a current asset and do not enter into this calculation.

4 0
2 years ago
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