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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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Dakota Corporation decided to issue three-year bonds denominated in 5 million Russian rubles at par. The bonds have a coupon rat
sertanlavr [38]

Answer:

23.39%

Explanation:

From the given information, the amount was raised in rubies, Hence, we will convert them to dollars to be able to pay back the needed obligations.

However, according to the exchange rates, the IRR of dollar cash flow is the actual cost of financing that the company will address.

By applying the EXCEL FORMULA to compute the actual cost of financing, we get;

   A                    B                    C                    D                          E

Coupon              17%

Year                      0                    1                    2                         3

Cashflow in

rubles            5,000,000   5000000*17%  5000000*17%    5000000+850

                                           = 850000          = 850000         000

                                                                                                 = 5850000

Exchange          $0.30         $0.032                 $0.034              $0.035

rate

(per rubles)   5,000,000       5,000,000          5,000,000      5,000,000

Cash flow      × 0.03            × 0.032               × 0.034           × 0.035

in dollars    =  $150000.00  27200.00        28900.00           204750.00

IRR                   23.39%

8 0
3 years ago
What is the advantage to a multi-criteria analysis?
telo118 [61]

Answer:

c. It is easily adaptable to as many suppliers as you need to evaluate

Explanation:

It involves many factor to analyze a decision due to variety of different assessments it has, it can be applicable to many supplier. It is very helpful to decision making because every aspect of each supplier is analyzed and makes a quality decision. Multi criteria analysis assess every supplier on different factors to find the difference between them and make a best decision.

8 0
3 years ago
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Alex787 [66]

Answer:

True

Explanation:

6 0
3 years ago
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In classical conditioning, the ns becomes a ________ after it reliably signals the occurrence of the ________.
Leto [7]

In classical conditioning, the Neutral Stimulus (NS) becomes a Conditioned Stimulus (CS) after it reliably signals the impending occurrence of the Unconditioned Stimulus (US).

The conditioned stimulus (CS) is a neutral stimulus (NS) that - after being repeatedly presented before the unconditioned stimulus - evokes a similar response as the unconditioned stimulus (US).

For example, a cat staring at a can of food (unconditioned stimulus) reacts differently to the sound of a can opener being struck on any surface (neutral stimulus). But if you condition a cat to believe that striking a can opener on any surface signals it will eat a can of food, the neutral stimulus becomes the conditioned stimulus.

Learn the difference between classical and operant conditioning here: brainly.com/question/17583598

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8 0
2 years ago
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vesna_86 [32]
Inventions usually start out with a small idea. Just like the story for honey bunches of oats, his daughter smiled because she knew he was up to something (and they never ever knew they would become very famous with their cereal). 

Since many people are dying from diseases, you could make an invention that rates how close you are to get that disease. It could warn you on when you might get it (for example, it tells you that a person behind you has a flu, so make sure to stay away from that person.). 

It would be called 'The-World-Is-Healthy' because it would decrease the spread of disease. 

That would change the world. 
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