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elena-s [515]
2 years ago
12

Seminole Corporation common stock currently sells for $32 per share. The firm recently paid a dividend of $1.25 per share. Flota

tion costs for new external equity are $3 per share. Analysts have forecast that earnings and dividends will grow at an average annual rate of 7% percent well into the future. What is the company's cost of internal equity?
Business
1 answer:
Tatiana [17]2 years ago
6 0

Answer:

The cost of internal equity is 11.18%

Explanation:

The constant growth model of DDM can be used to calculate the price of a stock if the growth rate in the dividend is expected to remain constant. The DDM values the stock based on the present value of the expected future dividends from the stock.

The formula for price today under DDM is,

P0 = D0 * (1+g) / r - g

We already know the P0, the D0 and the g. We can plug in these values in the formula to calculate r which is the cost of equity capital.

32 = 1.25 * (1+ 0.07)  /  (r - 0.07)

32 * (r - 0.07) = 1.3375

32r - 2.24 = 1.3375

32r = 1.3375 + 2.24

r = 3.5775 / 32

r = 0.11179 or 11.179%

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Ralph is a professional football player. He signs a valid contract with the Jets. Later, the Giants offer him more money, so he
svetoff [14.1K]

Answer:

C. The court will issue a preliminary injunction barring Ralph from playing with any team other than the Jets during the course of the lawsuit.

Explanation:

Signing a contract means that both the offering and the accepting parties are agreeing over the particular protocols. Offer, acceptance, and consideration are the important aspects of the contract. The acceptance of both parties over the same norms is the most essential part of the contract.

In the above situation, Ralph has violated the agreed contract with the Jets. He went forward and signed another contract with Giants. This action of Ralph was a strict violation of the contract agreed on by Ralph and Jets.  According to the judicial proceedings, Ralph was ordered to obey the contract and was barred from playing with any other team.

7 0
2 years ago
Following are some of Friendly Village’s transactions during the calendar year 2019. For each transaction, state (a) the amount
Lunna [17]

Answer:

1. Governmental type fund $605,000

Enterprise fund $605,000

2. Governmental type fund $100,000

Enterprise fund $5,000

3.Governmental type fund $13,000

Enterprise Fund $3,000

Explanation:

1a) Calculation to determine the amount the Village would report as expenditures for the year 2019

Governmental type fund=$600,000+$5,000

Governmental type fund=$605,000

1b) Calculation to determine the amount it would report as expenses for the year

Enterprise fund=$600,000+$5,000

Enterprise fund=$605,000

Therefore the amount the Village would report as expenditures for the year 2019 and the amount it would report as expenses for the year will be :

Governmental type fund $605,000

Enterprise fund $605,000

2a) Calculation to determine the amount the Village would report as expenditures for the year 2019

Based on the information the Governmental type fund will be the amount of $100,000 reason been that The truck cost the amount of $100,000

Governmental type fund=$100,000

2b) Calculation to determine the amount it would report as expenses for the year

Enterprise fund=[($100,000/10 years)*6/12]

Enterprise fund=$100,000*6/12

Enterprise fund=$5,000

Note that July 1 to December 31 will give us 6 months

Therefore the amount the Village would report as expenditures for the year 2019 and the amount it would report as expenses for the year will be :

Governmental type fund $100,000

Enterprise fund $5,000

3a. Calculation to determine the amount the Village would report as expenditures for the year 2019

Governmental type fund= $10,000+$3,000

Governmental type fund= $13,000

3b. Calculation to determine Calculation to determine the amount it would report as expenses for the year

Based on the information given we were told that he paid the interest amount of $3,000 as the first installment on the debt which means that the amount it would report as expenses for the year is $3,000

Enterprise fund $3,000

Therefore the amount the Village would report as expenditures for the year 2019 and the amount it would report as expenses for the year will be :

Governmental type fund $13,000

Enterprise Fund $3,000

8 0
2 years ago
Lilly Ann went to the pet store with her mother to buy a gerbil. After choosing her gerbil, she and her mother went to look at c
iogann1982 [59]

Answer:

The answer is "b" - Customization

Explanation:

<u>Product Customization</u> is a process of delivering customized goods and services to the customers as per their needs and desire. Customers can either approach a merchant to make certain customizations in a product or personalize the products themselves, exactly the way they want.

It is also known as product personalisation. This is evident in the given situation, as Lilly Ann can customize the cage according to her own preferences.

<u>Standardization</u>

  • Product standardization refers to the process of maintaining uniformity and consistency among the different iterations of a particular good or service that are available in different markets.
  • It is a process of marketing a good or service without making any changes to it
  • Standardization would be correct, if they brand offers the cage without any changes.

<u>Mass customization:</u>

  • Mass customization is a marketing and manufacturing technique which combines the flexibility and personalization of custom-made products with the low unit costs associated with mass production.
  • Other names for mass customization include made-to-order or built-to-order.

<u>Mass production:</u>

  • Mass production is the manufacturing of large quantities of standardized products, often using assembly lines or automation technology.
  • Mass production facilitates the efficient production of a large number of similar products.

<u>Modular design:</u>

  • Modular design is a design approach that creates things out of independent parts with standard interfaces.
  • This allows designs to be customized, upgraded, repaired and for parts to be reused.
7 0
3 years ago
Which of the following are criteria for determining whether to record an asset as a fixed asset? a.must be short-lived and tangi
Brut [27]

Answer:

The correct answer is letter "D": must be long-lived and used by the company in its normal operations.

Explanation:

Fixed assets are tangible resources used by a corporation to produce profits. To qualify as a fixed asset, the item can not be consumed or sold in less than one year and be part of the daily operations of the business. Fixed assets are listed on the balance sheet of the company and are subject to depreciation.

Examples of fixed assets include <em>buildings, factories, leasehold improvements, computers, electronic hardware, furniture, automobiles, </em>and <em>construction equipment.</em>

5 0
3 years ago
XYZ Corp issued $600,000 of 9% , 10-year bonds on June 30,2020, for $562,500. This price provided a yield of 10% on the bonds. I
Rom4ik [11]

Answer:

c. $18, 750

Explanation:

The computation of the amount of interest expense i.e. accrued is shown below:

= Issued amount × yield on the bonds × given months ÷ total number of months in a year

= $562,500 × 10% × 4 months ÷ 12 months

= $18,750

The 4 months is calculated from July 1 to October 31

Hence, the correct option is c. $18,750

5 0
3 years ago
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