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PSYCHO15rus [73]
3 years ago
15

The Drogon Co. just issued a dividend of $3.00 per share on its common stock. The company is expected to maintain a constant 6.2

percent growth rate in its dividends indefinitely. If the stock sells for $60 a share, what is the company’s cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places.
Business
1 answer:
Mars2501 [29]3 years ago
5 0

Answer:

The company’s cost of equity is 11.51%.

Explanation:

Please find the below for detailed explanations and calculations:

The company's cost of equity need to be found is the discounted rate that will bring net present value of its projected future dividend to its current stock price.

Denote cost of equity need to be found is x.

We apply the formula to calculated the present value of growing perpetuity to find x as shown below:

[ 3 x ( 1+0.062) ] / ( x - 0.062) = 60 <=> 3.186 / ( x - 0.062) = 60 <=> x = 11.51%.

Thus, the company's cost of equity is 11.51%.

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Last year Rocco Corporation's sales were $225 million. If sales grow at 6% per year, how large (in millions) will they be 5 year
cupoosta [38]

Answer:

b. $301.10

Explanation:

Current Sales = P = $225,000,000

Growth rate = g = 6%

Number of year = 5 years

Using simple growth formula we will find the Sales value after 5 years.

Future Sales = Current Sale ( 1 + growth rate )^Number of years

A = P ( 1 + g )^n

A = 225,000,000 x ( 1 + 0.06 )^5

A = 225,000,000 x 1.33823

A = 301,101,750 = 301.10175 Million

So, the correct option is b. $301.10.

3 0
4 years ago
How do you determine the focus of a commercial vs. a Psa?
Karolina [17]

The focus of a commercial vs. a Psa is given below

Explanation:

1.A commercial is an advertisement that airs for a specific amount of time and is paid for by a company. It is that company's intention to invest in the ad to entice people to buy. Public Service Announcements or PSA's on the other hand, are run on TV for free.

2.A Public Service Announcement (PSA) is a free “commercial” for a non-profit organization. It is aired voluntary by individual radio and/or TV stations. But To The Audience..... To the audience, a PSA is just another commercial.

3.A public service announcement (PSA) is a short, community-oriented message that radio stations air at no cost in order to fulfill their obligation to serve the public interest. ... Radio stations receive PSAs as audio files – typically recorded as :30 or :60-second messages.

4 0
3 years ago
Suppose that weekly output is worth $1000, and labor and materials costs are $300 and $200,respectively. What is the multifactor
Georgia [21]

Answer:

c. 2

Explanation:

The multifactor  productivity ratio can be determined using the below mentioned formula:

Multi factor productivity=Output worth/cost of material+cost of labor

In the given question:

Output worth=$1,000

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4 years ago
Helpp me plz now thx
Romashka-Z-Leto [24]
What’s the question? Am I missing something?
3 0
3 years ago
Are firms like homebuilders that sell products whose demand depends partly on demographic factors likely to be more or less affe
tekilochka [14]

Answer:

Yes. Firms that sell products that depend partly on demographic factors are more likely to be affected by business cycle.

Explanation:

Businesses whose demand depend partly in demographic factors (population based on race, sex, age, etc) such as homebuilders are affected by business cycles/seasons.

Demand for new houses can depend on some business seasons. A family that wants to move to a new location will consider age of the kids, parents before moving to a volatile neighborhood. Older people tend to prefer quieter areas, while younger people may prefer a more lively place to meet new friends.

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