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Aleonysh [2.5K]
4 years ago
12

Murray Motor Company wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay divi

dends (D1) of $1.80 per share, and the current price of its common stock is $36 per share. The expected growth rate is 9 percent. a. Compute the cost of retained earnings (Ke)
Business
1 answer:
frozen [14]4 years ago
4 0

Answer:

Cost of retained earnings  = 0.13

Explanation:

given data

(D1) = $1.80

current price = $36  

growth rate = 9 percent

solution

we get here Cost of retained earnings  (Ke) that is express as

Cost of retained earnings = ( D1 ÷ P ) + g    ................1

here P is price and g is growth rate

put here value and we get

Cost of retained earnings =  (1.80 ÷ 36 ) + 0.08

Cost of retained earnings  = 0.13

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Dale City is accumulating financial resources that are legally restricted to payments of general long-term debt principal and in
Yuri [45]

Answer:

D. $5,300,000 $0

Explanation

Debt service Fund General fund

Accumulated for principal payments $5,000,000 ( Debt service Fund)

Add Accumulated for interest payments $300,000( Debt service Fund)

Total $5,300,000

General fund

$0

$0

These restricted funds should be accounted for in the: Debt service fund General fund is $5,300,000 because the restricted funds of $5,000,000 accumulated for principal payments and $300,000 accumulated for interest payments should both be accounted for in the debt service fund.

4 0
3 years ago
Read 2 more answers
You are considering purchasing stock S. This stock has an expected return of 12 percent if the economy booms, 8 percent if the e
Ymorist [56]

Answer:

e. increase as the probability of a boom economy increases.

Explanation:

The most economic growth occurs when the economy is in boom state. This results in the highest rate of return on investments compared to all other states such as normal, recession. In this case, if the probability of boom economy increases, stock S will have an overall increase in expected return; it means that there is higher chance of earning 12% return which is the highest among those in other economy states. This makes choice E correct.

7 0
3 years ago
A firm's _____ resources are also known as labor. economic human intangible financial natural
stepan [7]
<span>A firm's human resources are also known as labor.Labor is the most important powerful resource in firm.They are responsible for the development of the firm.A good firm should have responsible labors and labors want to satisfy with their salary given by firm.Human resources should come up with the new ideas so that it will become an advantage to the firm.</span>
8 0
3 years ago
On January 1, 2012, Fei Corp. issued a 3-year, 5% coupon, $100,000 face value bond. The bond was priced at an effective interest
xz_007 [3.2K]

Answer:

c. $7,418

Explanation:

Calculation to determine What was Fei’s Interest Expense on the bond during fiscal year 2012

Using this formula

Interest Expense =Interest payable+Amortization of bonds discount interest expense

Let plug in the morning

Interest Expense=(5%*100,000)+$2,418

Interest Expense=$5,000+$2,418

Interest Expense=$7,418

Therefore Fei’s Interest Expense on the bond during fiscal year 2012 is $7,418

3 0
3 years ago
When price decreases, quantity increases. Price elasticity of demand measures how much ________.a. The price decreasesb. The pri
erastova [34]

Answer:  

Price elasticity of demand measures how much the quantity increases when price decreases.

Explanation:

Price elasticity is the percentage change in the quantity demanded, divided by the percentage change in the price.

If the percentage in the change in the quantity demanded is bigger than the percentage in the change of the price we talk about elastic demand.

If the percentage in the change in the quantity demanded is smaller than the percentage in the change of the price we talk about inelastic demand.

And if he percentage in the change in the quantity demanded is excatly the same than the percentage in the change of the price we talk about unit elastic demand.

6 0
3 years ago
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