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
Aleonysh [2.5K]
3 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]3 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

You might be interested in
Suppose Nick would like to invest $10,000 of his savings.
sammy [17]

Answer:

1. Suppose TouchTech, a hand-held computing firm, is selling stocks to raise money for a new lab—a practice known as___project__ finance. Buying a share of TouchTech stock would give Nick____equity interest in____ the firm. In the event that TouchTech runs into financial difficulty, _____bonds_____will be paid first.

2. Correct statements:

a. Expectations of a recession that will reduce economy-wide corporate profits will likely cause the value of Nick's shares to decline.

c. An increase in the perceived profitability of TouchTech will likely cause the value of Nick's shares to rise.

d. Alternatively, Nick could invest by purchasing bonds issued by the government of Japan.

3. Assuming that everything else is equal, a bond issued by a government that is engaged in a civil war most likely pays a ___higher__ interest rate than a bond issued by the government of Japan.

Explanation:

When Nick purchases stock in the private company, he invests in the equity of the company.  Project finance can be done through equity financing or debt financing.  Equity financing gives Nick an equity interest in the TouchTech and a share in the decision-making of the business, whereas debt financing pays a fixed amount of interest periodically without a share in the decision-making of the company.

5 0
2 years ago
All of the following statements regarding Government National Mortgage Association (GNMA) pass-through securities are true EXCEP
trasher [3.6K]

Answer:

B) GNMAs are considered to be the riskiest of the agency issues

Explanation:

The Ginnie Mae or GNMA pass through securities are mortgage backed. The Great recession taught us that mortgage backed securities are not always 100% secure, but they are still considered secure investments basically because they are guaranteed by the US government. They are similar to the securities sold by the US Treasury.

Ginnie Mae basically guarantees mortgages using federal funds (from Federal Housing Administration and Department of Veterans Affairs).

3 0
3 years ago
How might a customer react to a salesperson's<br> weak handshake?
melisa1 [442]

Answer:

I think the customer will get upset.

The customer will think the salesperson is not ready to attend to him.

6 0
2 years ago
Read 2 more answers
Boise Timber Co. computes its break-even point strictly on the basis of cash expenditures related to fixed costs. Its total fixe
JulsSmile [24]

Answer:

285,000 units

Explanation:

The computation of the cash break-even point of sales units is shown below:

Cash break-even point = (Fixed cost - depreciation) ÷ (contribution margin per unit)

where,

Fixed cost = $7,600,000

Depreciation = $7,600,000 × 0.25% = $1,900,000

And, the contribution margin per unit is $20

So, the cash break-even point of sales units is

= ($7,600,000 - $1,900,000) ÷ ($20)

= 285,000 units

8 0
3 years ago
You just received a gift from a friend consisting of 1,000 Thai baht, which you would like to exchange for Australian dollars (A
yanalaym [24]

Answer:

AUD 39.93 is expected to be received for your baht.

Explanation:

To calcuate the cross currency exchange rate between Thai Baht and AUD, inverse the USD per Thai Baht quote, this will give you (1/0.023 = 43.478). Now, multiply this by USD per AUD ( TBHT by USD multiplied by USD by AUD, thus USD will cancel out and leave you with TBHT by AUD). The Final ER will stand at TBHT 25.0434 per AUD. Divide the sum of TBHT 1000 by 25.0434 and you will recieve AUD 39.93

3 0
3 years ago
Other questions:
  • Jane receives utility from days spent traveling on va- cation domestically (D) and days spent traveling on vacation in a foreign
    12·1 answer
  • In the united states, federal taxes are due on which day
    13·1 answer
  • Faisal and Torie each want to make an investment, but they have different needs. Based on the information, which investment opti
    15·1 answer
  • The primary advantage an entrepreneur gains by leasing rather than buying facilities is
    15·1 answer
  • Vaida, a manager, sets up delivery schedules for the logistic team for the orders received online, as part of their new e-Commer
    6·2 answers
  • On January 1, 2013, Nichols Corporation granted 10,000 options to key executives. Each option allows the executive to purchase o
    7·1 answer
  • g According to the CAPM, what is the expected rate of return for a stock with a beta of 1.2. when the risk-free rate is 6% and t
    11·1 answer
  • Oliver Is a small manufacturing business owner. He has a limited number of employees working under him. He usually helps his emp
    9·1 answer
  • Choosing which types of assets you will invest in is known as
    8·1 answer
  • in an international setting, day-to-day decisions about labor relations are usually handled by each foreign subsidiary
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!