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netineya [11]
3 years ago
5

ABC Corp. is expected to pay an annual dividend in the amount of $2.50 a share next year. This dividend constantly grows by 5 pe

rcent per year. The current price of the company’s stock is $50.60 per share. What is the cost of equity?
Business
1 answer:
ryzh [129]3 years ago
5 0

Answer:

9.94%

Explanation:

The cost of equity can be determined from the constant dividend growth model

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid

r = cost of equity

g = growth rate

50.60 = 2.5 / (r - 0.05)

50.60(r - 0.05) = 2.5

(r - 0.05) = 2.5 / 50.60

(r - 0.05) = 0.0494

r =  0.0494 + 0.05

r = 0.0994

r = 9.94%

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The answer is actually FALSE.
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"Gap" insurance a. is a good deal for the buyer. b. pays off the loan balance as well as being very profitable for the dealer. c
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Answer:

c. is very profitable for the dealer

Explanation:

"Gap'' Insurance pays off the loan balance if the insurance payment is insufficient also it is profitable for dealer as well. Sometime the main insurance claim cannot fufill the loss so those that cannot be fullfill by main insurance are manage by gap insurance.

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A higher level of material well-being. checked Reducing the threat of war. checked Deterring monopoly. checked Promoting competi
olchik [2.2K]

Answer: The answer is benefits of international trade

Explanation:

In the question, no specific question was asked. But I think the question is about the benefits of international trade.

International trade is a trade between one country and the other.it can also be said to be the buying and selling of goods and services across national boundaries. The following are the benefits of international trade

A higher level of material well being : international trade leads to increased standard of living among nations of the world. In the sense that, it increases output and the opportunity to acquire goods that we would otherwise have been unable to produce ourselves, it would lead to increase in national income which will in turn lead to increased in investment which will enhance the welfare of all citizens

Reducing the threat of war: international trade bring about a better understanding among nations of the world. It promotes international friendship and world peace.

Deterring monopoly : international trade helps in preventing monopoly by ensuring that goods comes from other countries of the world.

Promoting competition : international trade helps in promoting competition among nations of the world. In the sense that,countries compete for trade in order to increase their own volume of the world trade as a measure to avoid balance of payment deficit.

Gains from specialization : international trade help countries to specialize in commodities which they can best produced. It leads to increased output and employment throughout the world from which every nation can benefit.

A more efficient allocation of resources : international trade help countries to allocate their resources efficiently. In the sense that, each country will specialize in the production of those commodities in which the country has comparative cost advantage over other countries by directing their resources to those areas of comparative lower cost, world output will be increased.

6 0
3 years ago
Hooray! You hit your sales number for the quarter and are awarded a $3,000 bonus. You spend $2,100 on a new living room TV and e
kotykmax [81]

Answer:

0.7 and 0.3

Explanation:

Data provided in the question

Awarded bonus value = $3,0000

Spending amount on a new living room = $2,100

So by considering the above information , the MPC and MPS is

As we know that

MPC = change in Consumption spending ÷ change in income

        = $2,100 ÷ $3,000

        = 0.7

And, the

MPC + MPS = 1

0.7 + MPS = 1

So, the MPS is 0.3

4 0
3 years ago
Amy transfers property with a tax basis of $970 and a fair market value of $650 to a corporation in exchange for stock with a fa
Morgarella [4.7K]

Answer:

$775

Explanation:

Calculation for Amy's tax basis in the stock received in the exchange

Using this formula

Tax basis in the Stock received Exchange = Tax basis - Liability on property transferred

Let plug in the formula

Tax basis in the Stock received Exchange=$970-$195

Tax basis in the Stock received Exchange = $775

Therefore Amy's TAX BASIS in the stock received in the exchange will be $775

5 0
3 years ago
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