The cost of equity from retained earnings based on the DCF approach=9.44%
Explanation:
- The cost of equity from retained earnings based on the DCF approach can be calculated as follows,
- Therefore, rs =
+ g
Answer:
(Decrease, Increase)
Explanation:
When the government formulates and implements policies aimed at increasing equality, the society will experience a reduction in the level of efficiency. For example, an increase in income tax on wealthiest Americans, and redistribution of the tax revenue to the poorest Americans would may discourage the wealthy from taking more income-generating activities which create jobs, this is not optimal. At the same time, this policy would reduces the peoples’ incentive to work hard to earn their own money.
Interest rate risk
Interest rate risk is the risk that arises for fixed-rate investments from fluctuating interest rates. How much interest rate risk a fixed-rate investment has depends on how sensitive its price is to interest rate changes in the market.
Answer
Customers compare brands and plan for the purchase of a speciality product.
Explanation
These are those products that have unique characteristic and brand identification where specific customers are willing to make a purchase of the product with personal efforts.These products apply to specif customers who are willing to make an effort during the purchase process.A Ferrari can serve as a good example.
Answer:
$1,771
Explanation:
Federal income tax = Gross pay × 12% = $2,300 × 12% = $276
State income tax = Gross pay × 3% = $2,300 × 3% = $69
Social security tax = Gross pay × 6% = $2,300 × 6% = $138
Medicare tax = Gross pay × 1.5% = $2,300 × 1.5% = $34.50
Disability insurance = Gross pay × 0.5% = $2,300 × 0.5% = $11.50
Gross pay = Hourly pay × Number of hours × Number of employees
= $11.50 × 40 × 5
= $2,300
Net pay = Gross pay – All deduction
= $2,300 – (276 + 69 + 138 + 34.50 + 11.50)
= $1,771
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