Fore Farms reported a pretax operating loss of $137 million for financial reporting purposes in 2021. Contributing to the loss w
1 answer:
Answer: Hello your question is incomplete attached below is the complete question
answer:
1) attached below
2) Net operating income ( loss ) = - $104 million
Explanation:
Pretax operating loss = - $137 million
Non deductible Losses ; $5 million fine paid in 2021 ,
estimated $12 million loss from contingency that will be tax deductible in 2022
Enacted tax rate = 25%
Taxable operating income = - $120 million
attached below is the solution
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Answer:
cost of equity = 13%
Explanation:
With the info given, we will use cost of equity formula from Dividend Growth Model. THis is given by:
Where D_1 is the next year dividend or D_1 = D_0(1+g)
P_0 is current stock price
g is the growth rate
Since D_0 (dividend this year) is 4.20 and g = 6.4% or 0.064, we can calculate D_1:
Current share price is 68, so we can now calculate cost of equity:
Hence,
cost of equity = 13%