Answer:
-2.23%
Explanation:
The formula to compute the cost of common equity under the DCF method is shown below:
= Current year dividend ÷ price + Growth rate
In first case,
The current dividend would be
= $0.85 + $0.85 × 5%
= $0.85 + $0.0425
= $0.8925
The other things would remain the same
So, the cost of common equity would be
= $0.8925 ÷ $20 + 5%
= 0.044625 + 0.05
= 9.46%
In second case,
The price would be $40
The other things would remain the same
So, the cost of common equity would be
= $0.8925 ÷ $40 + 5%
= 0.0223125 + 0.05
= 7.23%
The difference would be
= 7.23% - 9.46%
= -2.23%
Answer:B. Good attendance
Explanation: Employers want their employees to have good attendance, this is a good quality, it is NOT a reason why employees lose their jobs.
Answer:
Level of sales in dollars in order to generate a profit of $54,000 Fixed cost + Target profit/Contribution per unit $270,000 + $54,0000/0.75
= $432,000
Number of units to be sold
= Level of sales/Selling price
= $432,000/$36
= 12,000 units
The correct answer is A
Explanation:
In this case, we need to calculate level of sales in dollars, which is fixed cost plus target profit divided by contribution margin ratio. Then, we will calculate no of units to be sold, which is the level of sales divided by selling price.
Answer:
A firm's normal range of operating activities is relevant range of operations.
Explanation:
Relevant range of operations can be described simply as a firm or company's expected range of activities without any extreme economic conditions. It is the range where the firm operates in normal conditions. Within this range the firm's operations run smoothly. Outside this range revenue and expenditure may fluctuate from what was expected.
Answer:
The correct answer is option D.
Explanation:
Long-run elasticities of demand differ from short-run elasticity. In the short period is more inelastic. This is because people take time to adjust their consumption habits. So if the time period people have to adjust to the price change is long, then the demand will be elastic.
Durable goods can be used for a relatively long time. So they will have a less elastic demand.
