Answer: 14%
Explanation:
We can calculate this using the Gordon Growth Model which looks like this,
P = D1 / r - g
P is the current stock price
D1 is the next dividend
r is the rate of return or the cost of capital
g is the growth rate.
We have all those figures except the cost of capital so making r the subject of the formula we can solve for it. Doing that will make the formula,
r = D/ P + g
r = 1.55 / 22.10 + 0.07
r = 0.1401
r = 14%
14% is the equity cost of capital.
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Answer:
Total current assets $83,580
Explanation:
The preparation of the current assets section of the balance sheet is shown below:
<u>Current Assets Amounts </u>
Cash $22,360
Debt investments(short term) $17,360
Accounts receivables $30,100
Supplies $8,170
Prepaid Insurance $5,590
Total current assets $83,580
Answer:
June 1 Sheldon Cooper invests $4,000 cash in exchange for shares of common stock in a small welding business.
Account Debited: Cash
Account Credited: Common Stock capital
2 Purchases equipment on account for $1,200.
Account Debited: Equipment
Account Credited: Accounts Payable
3 Pays $800 cash to landlord for June rent.
Account Debited: Rent expense
Account Credited: Cash account
12 Bills P. Leonard $300 after completing welding work done on account.
Account Debited: Accounts receivable
Account Credited: Service revenue
Answer: The monthly payment will be $2007.81.
We have:
Cost of the sports coupe (PV) $84,500
Annual Percentage Rate (APR) 6.6%
Loan tenure in months (n) 48
We can find the monthly payment by using the Present value of an annuity formula:
![\mathbf{PV_{Annuity}= PMT * \left ( \frac{1-(1+r)^{-n}}{r} \right )}](https://tex.z-dn.net/?f=%5Cmathbf%7BPV_%7BAnnuity%7D%3D%20PMT%20%2A%20%5Cleft%20%28%20%5Cfrac%7B1-%281%2Br%29%5E%7B-n%7D%7D%7Br%7D%20%5Cright%20%29%7D)
Since APR is a yearly number, we need to convert it into a monthly rate.
So , ![r = \frac{0.066}{12} = 0.0055](https://tex.z-dn.net/?f=r%20%3D%20%5Cfrac%7B0.066%7D%7B12%7D%20%3D%200.0055)
Plugging values in the PV formula above we get,
![\mathbf{84500 = PMT * \left ( \frac{1-(1+0.0055)^{-48}}{0.0055} \right )}](https://tex.z-dn.net/?f=%5Cmathbf%7B84500%20%3D%20PMT%20%2A%20%5Cleft%20%28%20%5Cfrac%7B1-%281%2B0.0055%29%5E%7B-48%7D%7D%7B0.0055%7D%20%5Cright%20%29%7D)
![\mathbf{84500 = PMT * \left ( \frac{1-0.768529253}{0.0055} \right )}](https://tex.z-dn.net/?f=%5Cmathbf%7B84500%20%3D%20PMT%20%2A%20%5Cleft%20%28%20%5Cfrac%7B1-0.768529253%7D%7B0.0055%7D%20%5Cright%20%29%7D)
![\mathbf{84500 = PMT * \left ( \frac{0.231470747}{0.0055} \right )}](https://tex.z-dn.net/?f=%5Cmathbf%7B84500%20%3D%20PMT%20%2A%20%5Cleft%20%28%20%5Cfrac%7B0.231470747%7D%7B0.0055%7D%20%5Cright%20%29%7D)
![\mathbf{84500 = PMT * 42.08559028}](https://tex.z-dn.net/?f=%5Cmathbf%7B84500%20%3D%20PMT%20%2A%2042.08559028%7D)
![\mathbf{\frac{84500}{42.08559028}= PMT}](https://tex.z-dn.net/?f=%5Cmathbf%7B%5Cfrac%7B84500%7D%7B42.08559028%7D%3D%20PMT%7D)
![\mathbf{PMT = 2007.813112}](https://tex.z-dn.net/?f=%5Cmathbf%7BPMT%20%3D%202007.813112%7D)