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kipiarov [429]
3 years ago
9

A common stock pays an annual dividend per share of $2.10. The market capitalization rate (required return on equity) is 10.0%.

If the annual dividend is expected to remain at $2.10, what is the value of the stock
Business
1 answer:
Inessa05 [86]3 years ago
3 0

Answer:

the  value of the stock is $21

Explanation:

The computation of the value of the stock is given below:

= Annual dividend per share ÷ required rate of return

= $2.10 ÷ 10%

= $21

Hence, the  value of the stock is $21

We simply divided the annual dividend from the required rate of return so that the value of the stock could come

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Avicorp has a $ 12.9 million debt issue​ outstanding, with a 5.9 % coupon rate. The debt has​ semi-annual coupons, the next coup
zloy xaker [14]

Answer:

a)

Pre-tax Cost Of Debt = 7.64%

b)

Tax Rate = 40%    

Post Tax cost of debt = 7.33% * (1 - 40%) = 4.58%  

So Post Tax cost of Debt = 4.58%

Explanation:

Bond Par Value =  12,900,000  

Bond Market Price 93% of face value = 11,997,000  

Years To maturity = 5.00  

Annual Interest 5.9% = 761,100

Formula = [Annual Interest + (Par Value-Market Value) / Years to Maturity] / [(Par value+Market Price*2)/3]

Year To Maturity = [761100 + (12900000 - 11997000) / 5] / (12900000 + 2*11997000) / 3

Year to maturity = 7.33%

8 0
3 years ago
What are three components of money management? List and explain each component.
Solnce55 [7]

Answer:

Management, Monitoring, and Maintenance.

Explanation:

They can help you get your finances under control and have some well-deserved peace of mind. Management One of the best things you can do to get the most out of your money is to manage it more closely.

3 0
3 years ago
On January 1, 2020, Cracker Co. purchased 40% of Dallas Corp.'s common stock at book value of net assets. The balance in Cracker
Sav [38]

Answer: $680,000

Explanation:

From the question, we are informed that Cracker Co. purchased 40% of Dallas Corp.'s common stock at book value of net assets on January 1, 2020 and that the balance in Cracker's Equity Investment account was $820,000 at December 31, 2020.

We are further told that Dallas reported net income of $500,000 for the year ended December 31, 2020, and paid dividends totaling $150,000 during 2020.

The amount paid by Cracker Co. for its 40% interest in Dallas Corp goes thus:

It should be noted that the balance in Cracker's Equity Investment account as at December 31st 2020 is the addition of the acquisition price and the share in net income after which the dividend share is deducted from the value of the addition gotten. This can be written as:

Acquisition price + (500000 × 40%) -(150000 × 40%) = $820,000

Acquisition price + (500000 × 0.4) -(150000 × 0.4) = $820,000

Acquisition price + $200,000 - $60,000 = $820,000

Acquisition price = $820,000 + $60,000 - $200,000

Acquisition price = $680,000

Cracker Co. paid $680,000 for its 40% interest in Dallas Corp.

4 0
3 years ago
The common stock of tasty treats is valued at $10.80 a share. the company increases its dividend by 8 percent annually and expec
V125BC [204]
Hello! I believe the correct answer to your question would be r = 0.09852, or around 9.85%. Hope this helps, and have a great day :)
5 0
3 years ago
Categorize each transaction according to the U.S. account to which it belongs and the direction the money flows.
Neko [114]

Answer:

The missing options are "US Account - Private sales and purchase of assets, Office asset sales and Purchase, Transfer, Factor Income, Sales and Purchase of goods and services

The direction of flow option are "Payment to foreigners, Payment from foreigners"

a. An Australian company buys steel from a U.S. firm.

Account: Sales and purchase of goods and service

Direction: Payment from foreigners"

b. The Federal Reserve buys $2 billion worth of euros.

Account: Official asset sales and purchase

Direction:Payment to foreigners

c. Profits are earned by a U.S. based mining company operating in Mexico.

Account: Factor Income

Direction: Payment from foreigners

d. An English company purchases a U.S. confectionary manufacturer.

Account: Private sales and purchase of goods

Direction: Payment from foreigners

4 0
3 years ago
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