Answer:
C) RE = D1/P0 + g
Explanation:
The formula above is the cost of retained earnings or the cost of equity.
The first portion of the formula (D1/P0) is known as dividend yield which is simply dividend divided by price.
The second part(g) is known as the growth rate of dividends.
The initial formula is rearranged thus:
P0=D1/(RE – g)
P0*(RE – g)=D1
RE – g=D1/P0
RE=D1/P0+g
Answer:
$23,000
Explanation:
Total dividends = $138,000 (Paid in 2020)
Common stock outstanding = 46,000 shares
Preferred dividend = Number of shares × Par value × 5%
= 11,500 × $100 × 5%
= $57,500
Dividends received by common stock holders in 2020 is;
= Total dividends - Preferred dividend
= ($138,000 × 1) - ($57,500 × 2)
= $138,000 - $115,000
= $23,000
Answer:
$42
Explanation:
APR = 18% , month rate = 18%/12 = 1.5%
Fee for cash advance = 2%
Cash advance of the first day of month = $1,200
Finance charge = Cash advance * (Monthly rate + Advance cash fee)
Finance charge = $1,200*1.5% + $1,200*2%
Finance charge = $18 + $24
Finance charge = $42
So, the approximate total finance charge i will pay on this cash advance for the month is $42
Answer:
Solution attached in picture
Explanation:
