Answer:
10.03%
Explanation:
Using the dividend discount formula, find the cost of equity; r
whereby,
D1 = Next year's dividend = 5.29
P0 = Current price of the stock = 79.83
g = growth rate of dividends = 3.40% or 0.034 as a decimal
Next, plug in the numbers to the formula above;
As a percentage, r = 10.03%
Therefore, the company's cost of equity is 10.03%
Answer:
Option E
Explanation:
In simple words, the given case illustrates the cost analysis method for choosing target market segments. Under such criterion of selection, the subject company identifies various costs that it must bear in order to operate in some potential segment and after identifying those cost, such company evaluates if there will be any profit left for them in the market.
This method is complex, time consuming and needs experts advise but still is most popular nowadays as it gives most accurate results by identifying various quantitative and qualitative factors.
Answer:
$2100
Explanation:
Net loss = $5000
Taxable income = $15000
Tax rate = 21%
Fast Rocket's total tax for both years is determined by
Taxable income minus net loss multiplied by tax rate
= $(15000-5000) × 21%
= $10000 × 0.21
= $2,100
Fast Rocket's total tax for both years = $2100
