Answer:
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Explanation:
Answer:
a. The cost of equity is 5.538%
b.The cost of equity is 13.475%
Explanation:
a.
The DDM approach has several models that are used to calculate the price of the share. As the dividend growth is constant forever, we use the constant growth model of DDM to estimate the required rate of return or cost of equity as other variables are known.
The formula for price using the constant growth model is:
P0 = D0 * (1+g)/ r - g
Plugging in the value,
78 = [0.4 * (1+0.05)] / (r - 0.05)
78 * (r - 0.05) = 0.42
78r - 3.9 = 0.42
78r = 3.9 + 0.42
r = 4.32 / 78
r = 0.05538 or 5.538%
b.
The SML approach uses the risk free rate and market risk premium along with stock's beta to calculate the cost of equity or required rate of return.
The cost of equity using SML is:
r = 0.061 + 1.25 * (0.12 - 0.061)
r = 0.13475 or 13.475%
We can calculate for the total stockholders’ equity by using
the formula:
Total stockholders’ equity = Number of Shares * Price per
Share – Deficit Balance
Substituting our given values:
Total stockholders’ equity = 19,000 shares * ($12 / share) - $75,000
Total stockholders’ equity = $153,000
I would say secondary schools attended. I think so because this wouldn't effect anything, it would just let other people know that you are attending other schools other than your main one, that may be connexus or ETC.
Answer:
The vaule of technology in business is very important like the most important of the business because it help keeps tracks of things, save database, and it help the business grow.