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rjkz [21]
2 years ago
15

Floyd Industries stock has a beta of 1.25. The company just paid a dividend of $.40, and the dividends are expected to grow at 5

percent per year. The expected return on the market is 12 percent, and Treasury bills are yielding 5.0 percent. The most recent stock price for Floyd is $67. a. Calculate the cost of equity using the DDM method. (Round your answer to 2 decimal places. (e.g., 32.16)) DCF method % b. Calculate the cost of equity using the SML method.
Business
1 answer:
stiks02 [169]2 years ago
3 0

Answer:

5.62%

13.75%

Explanation:

According to the DDM method,

the value of a stock = [dividend x ( 1 + growth rate)] / [cost of equity - growth rate]

67 = 0.4(1.05) / r - 0.05

multiply both sides of the equation by r -0.05

67(r - 0.05) = 0.42

divide both sides of the equation by 67

r - 0.05 = 0.006269

r = 0.0563

= 5.63%

b. the cost of equity using the capm method =

risk free rate of return + beta x ( expected return - risk free return)

5% + 1.25 x (12 - 5) = 13.75%

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kondor19780726 [428]

Answer:

$4,000,000 Shares

Explanation:

Calculation for how many shares will be outstanding after the stock​ split

Using this formula

Outstanding Shares after stock split =Shares​ outstanding ÷Reverse stock split

Let plug in the formula

Outstanding Shares after stock split =$40,000,000÷10

Outstanding Shares after stock split =$4,000,000 Shares

Therefore the amount of shares that will be outstanding after the stock​ split will be $4,000,000

8 0
3 years ago
What must a landlord or homeowner post that informs workers that the homeowner is not responsible for the work being performed?
Phantasy [73]

Answer:

A notice of cessation

Explanation:

A notice of cessation is a written notice that is issued by the contractee or the owner of a project (or his or her agent) to inform concerned parties that no work has been performed at the project site for a certain period. This notice also sets the time frame within which the affected parties may carry out their lien rights against one another

5 0
3 years ago
On December 1, Marzion Electronics Ltd. has three DVD players left in stock. All are identical, all are priced to sell at $161.
Leni [432]

Answer:

$208

Explanation:

Using the FIFO Inventory method, inventory items are assumed to be sold in the order in which they were purchased from the earliest to the latest.

The order of purchase of the inventory items are.

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Nov. 1, DVD Player 1045, $95

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Therefore, if two of the three items are sold, the cost of goods sold is the cost of the first two items purchased

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4 0
3 years ago
Read 2 more answers
What is Equity financing
MakcuM [25]
Equity Financing is when a business owner exchanges a qualified support in the company towards to an investor. Examples that I can name are Initial Public Offering, Small Business Investment Companies, Royalty Financing, and many more that I just listed. I hope it helps to your question and have a blessed day.
7 0
2 years ago
Thomlin Company forecasts that total overhead for the current year will be $11,742,000 with 164,000 total machine hours. Year to
Basile [38]

Answer:

d.$72 per machine hour

Explanation:

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therefore,

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The predetermined overhead rate based on machine hours is $72 per machine hour.

3 0
3 years ago
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