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Verdich [7]
3 years ago
13

Company ABC just paid an annual dividend of $3.55 on its common stock. The firm increases its dividend by 3.55 percent annually.

What is the company's cost of equity if the current stock price is $43.24 per share?
Business
1 answer:
velikii [3]3 years ago
6 0

Answer:

8.5%

Explanation:

Company ABC just paid an annual dividend of $3.55

The firm increases its dividend by 3.55 percent annually

The current stock price is $43.24

Therefore the company cost of equity can be calculated as follows

= 3.55 × (1+3.55/100)/43.24+3.55/100

= 3.55 × 1+0.0355/43.24+0.0355

= 3.55 × 1.0355/43.2755

= 3.6760/43.2755

= 0.085× 100

= 8.5%

Hence the company cost of equity is 8.5%

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Likurg_2 [28]

Answer: B. Money matters

Explanation: “Financial” means the management of money, so money matters would be the correct answer.

5 0
4 years ago
Bob and Rob have started a food delivery business together called Grub Galore in their college town. They have not incorporated
Neko [114]

Answer:

Partnership Business

Explanation:

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Grub Galore is owned by Bob and Rob which makes it a partnership business.

Advantages

1) Profit is shared by partners only.

2) It is financed by more than one person which makes capital more available.

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Disadvantages

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5 0
3 years ago
What are the four types of costs that a business must consider in making business decisions
klio [65]

Fixed and Variable

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Product and Period

7 0
3 years ago
Place in chronological order the lag phenomena associated with the use of fiscal policy to smooth business cycles.
maxonik [38]

Answer:

1. Recognition lag

2. Implementation lag

3. Impact lag

Explanation:

4 0
3 years ago
Which of the following is most likely to be a primary data source:
love history [14]

Answer:

d. A customer survey

Explanation:

Data collected by researchers for the first time for a specific study is primary data.  A customer survey is a method of collecting primary data. A customer survey gathers information on the research topic directly from respondents.

Primary data like surveys are costly and consume time to collect, unlike secondary data. Other methods of collecting primary data include administering questionnaires, direct or indirect personal interviews, field observations, and experiments.

7 0
3 years ago
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