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Verdich [7]
3 years ago
7

Pepper Inc.’s common stock currently sells for $15.00 per share, the company expects to pay $1.925 dividend in the coming year a

nd it expects the dividend to grow at a constant growth rate of 6.00%. New stock can be sold to the public at the current price, but a flotation cost of 8% would be incurred. By how much would the cost of new stock exceed the cost of retained earnings? Do not round your intermediate calculations. Hint: Re-Rs
Business
1 answer:
dedylja [7]3 years ago
6 0

Answer:

The correct answer is 0.78%.

Explanation:

According to the scenario, the computation of the given data are as follows:

First we calculate the retained earning cost, then

Cost of retained earning = Dividend ÷ Price + Growth

= (1.925 × 70%) ÷ 15 + 6%

= 1.3475 ÷ 15 + 0.06

= 0.1498 or 14.98%

Now, Cost of equity = (Dividend ÷ Price (1 - Flotation cost ) + Growth

= (1.925 × 70% ) ÷ 15 (1 - 0.08) + 0.06

= (1.3475 ÷ 13.8 ) + 0.06

= 0.1576 or 15.76%

So, Exceed amount = 15.76% - 14.98% = 0.78%

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In an​ expansion, taxes rise and government expenditures​ fall, and therefore act as automatic​ ________. Inflation is more like
Sergeu [11.5K]

Answer:

The correct answer is: stabilizers; destabilizer.

Explanation:

The automatic stabilizer is a government policy that correct fluctuations in the economy through their normal operation and hence they are called automatic stabilizers.  

Taxes and government spending are examples of automatic stabilizers.  

During an expansion, taxes increase with an increase in income and government spending decrease. These two without any intervention by the government automatically stabilize the economy.  

Automatic destabilizer causes fluctuations by their normal operation. An example of destabilizer is inflation which increases during expansion and causes fluctuations without any intervention.

6 0
3 years ago
On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased an additional $7
Maurinko [17]

Answer:

Option (c) is correct.

Explanation:

Given that,

Raw materials on hand = $32,000

Purchased an additional raw materials = $78,000

During November,

Raw materials were requisitioned = $95,000

Totaled  indirect materials = $3,000

The journal entry is as follows:

Work in process inventory (95,000 - 3,000) A/c      Dr. $92,000

Manufacturing overhead A/c                                      Dr. $3,000

To Raw material A/c                                                                        $95,000

The work in process is debited by $92,000 and raw material is credit by $95,000.

5 0
3 years ago
Kela Corporation reports net income of $550,000 that includes depreciation expense of $76,000. Also, cash of $53,000 was borrowe
Bogdan [553]

Answer:

$626,000

Explanation:

Kela corporation has a net income of $550,000

Depreciation expense is $76,000

Cash is $53,000

Therefore the total cash inflows from operating activities can be calculated as follows

=$550,000 + $76,000

$626,000

Hence the total cash inflow from operating activities is $626,000

3 0
2 years ago
In a group setting, "recording secretary," "moderator," "initiator," and "information seeker" are examples of
kogti [31]

In a group setting, "recording secretary (taking the notes)," "moderator” (the facilitator of discussion)," "initiator" (the one who generates new concepts and offers the new solution) and "information seeker" are examples of Task roles. The Task roles are the one that is directly related to the successful achievement of <span>the task and goals of the group.</span>

4 0
3 years ago
Read 2 more answers
Which of the following is not a product cost?
Sedbober [7]

Explanation:

d indirect materials used in production hope it's right

6 0
3 years ago
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