Answer:
because answer key you give you answer
Answer: $27.47
Explanation:
Given: Growth rate = 4.70% per year = 0.0470 per year
Dividend of next year = $2.50
Expected rate of return on Stock = 13.80% =0.1380
Current price = (Dividend of next year ) ÷ (Expected rate - Growth rate)
= (2.50)÷ (0.1380-0.0470)
= (2.50) ÷ (0.091)
≈ $27.47
Hence, you will pay $27.47 for the company's stock today.
Answer:
the formula used to calculate the cost of equity (required rate of return) based on the bond yield plus risk premium is fairly simple:
cost of equity (Re) = yield of debt (bonds) + firm's risk premium = 11.52% + 3.55% = 15.07%
I'm not sure if the question was copied correctly or not, so I looked for similar questions and it included different numbers.
<em>The Harrison Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of internal equity. Harrison's bonds yield 10.28%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 4.95%. Based on the bond-yield-plus-risk-premium approach, Harrison's cost of Internal equity is: = 10.28% + 4.95% = 15.23%</em>
<em>Another question: </em>
<em>The Kennedy Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of internal equity. Kennedy's bonds yield 11.52%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 4.95%. Based on the bond-yield-plus-risk-premium approach, Kennedy's cost of internal equity is: = 11.52% + 4.95% = 16.47%</em>
Answer:
TRUE
Explanation:
As Cherry Doux Bakery reaches an agreement with Candy Call to use Candy Call's original dark chocolate in its popular chocolate cookies and sell them in its stores. The two companies are using a strategy known as co-branding. Co-branding is a marketing technique where two brands pool their resources and share advertisement, technology, risks and sell their products/services together which is quite helpful for the both brands. For example, when Dell use intel processors and advertise it in its ads, it is a perfect example of co-branding. Co-branding is help and effective for both of the organization. One company can leverage its products and this sales with the help of another company. In this strategy, strategic alliance between both brands can get stronger hold in the market with more and enhanced brand awareness as well.
Answer:
The total manufacturing cost per unit is $10.50
Explanation:
Material cost per unit = Total material cost / Equivalent units of Material cost
Material cost per unit = $60,000 / 10,000 = $6 per unit
Conversion cost per unit = Total Conversion cost / Equivalent units of conversion cost
Conversion cost per unit = $90,000 / 20,000 = $4.5 per unit
Total Manufacturing cost = $6 + $4.50 = $10.50 per unit
