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KATRIN_1 [288]
3 years ago
14

The Gecko Company and the Gordon Company are two firms whose business risk is the same but that have different dividend policies

. Gecko pays no dividend, whereas Gordon has an expected dividend yield of 5 percent. Suppose the capital gains tax rate is zero, whereas the income tax rate is 25 percent. Gecko has an expected earnings growth rate of 8 percent annually, and its stock price is expected to grow at this same rate.Required:If the aftertax expected returns on the two stocks are equal (because they are in the same risk class), what is the pretax required return on Gordon’s stock? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)Pretax return %
Business
1 answer:
julia-pushkina [17]3 years ago
5 0

Answer:

10.67%

Explanation:

Gecko Company

Gecko = Expected Earnings growth rate = 8% annually

As there are no Capital gains tax, thus after Tax returns = Pretax returns

= 8%

Expected Dividend yield of Gordon = 5%

After tax returns = 5(1-.25)

=5(0.75)

= 3.75%

Assuming the pay out ratio = 100%

Gordon’s required pretax return = 8/ (1-.25)

=8/0.75

= 10.67%

At pretax return of 10.67% on Gordon the after tax returns on both the stocks are equal.

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P = PRICE

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Vega corporation expects to pay a 4​% bonus on net income after deducting the bonus. assume the corporation reports net income o
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Hey there!

the answer is

A credit to Employee Bonus Payable, $5,000

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R(0,t) is the Spot Zero-Coupon (or Discount) Rate. It is the annualized rate on a pure Unit Discount bond B(0,t) - the bond that
nikitadnepr [17]

Answer:

0.368

Explanation:

Price of B(0,13) = 1 / (1 + interest rate)^years

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a. True

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This system of performance review is a 360-degree review or feedback process where a given employee receives inputs on her performance (or other criteria such as behaviors, competencies and results achieved) from different employees with varying working relationships and at different levels.  The idea is to ensure that the employee's performance is not partial or biased.  Using this system, the employee who may be a manager will have her performance reviewed by employees below, above, and on the same level with her.

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katovenus [111]

The specific set of organizational practices, policies, and programs, plus a philosophy that actively supports efforts to help employees achieve success at both work and home considered is -work-life effectiveness. This is further explained below.

<h3>What is organizational practices?</h3>

Generally, An organizational practice is the habitual application of knowledge inside an organization for the purpose of carrying out a certain function. This application of knowledge has developed over the course of time as a result of the history, people, interests, and activities of the organization.

In conclusion, The precise combination of corporate practices, policies, and programs, plus a mindset that actively supports efforts to assist individuals to achieve success at both work and home regarded called -work-life effectiveness.

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