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uranmaximum [27]
2 years ago
5

Jarett & son's common stock currently trades at $30.00 a share. it is expected to pay an annual divident of $1.00 a share a

the end of the year(d1 = 1.00) and the constant growth rate is 4% a yearA) What is the company's cost of common equity if all of its equity comes from retained earnings?B) If the company issued new stock, it would incur a 10% flotation cost. What would be the cost of equity from new stock?
Business
1 answer:
mart [117]2 years ago
4 0

Answer and Explanation:

The computation is shown below:

a. The company cost of capital is

Cost of equity = (D1 ÷ share price)+ Dividend growth rate

= ($1 ÷ $30) + 0.04

= 0.033 +0.04

= 0.0733 or 7.33%

Now  

b. Cost of new equity is

= (D1 ÷ share price ×  (1 - flotation cost)) + Dividend growth rate

= [$1 ÷ $30 × (1 - 0.1)] + 0.04

= ($1 ÷ $30 × 0.9) + 0.04

= 1 ÷ 27 + 0.04

= 0.037 + 0.04

= 0.07704 or 7.71%

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What political reasons Government intervention in markets​
Varvara68 [4.7K]

Answer:

The main reasons for policy intervention by the government are:

To correct for market failures.

To achieve a more equitable distribution of income and wealth.

To improve the performance of the economy.

Explanation:

To correct for market failures: This is achieve by creating regulation institutions for the most important sectors in any given economy e.g. Federal Reserve, Treasury Department

To achieve a more equitable distribution of income and wealth: This is the aim of a develop economy to allocate the resources where needed and for that some countries rely in the government capability to prevent Monopoly creation or to protect its Internal Labor market.

To improve the performance of the economy.: In order to meet the economical agenda of any given government the institutions use variation on the interest rate, the government expenditure or the tax policies.

6 0
3 years ago
Global reserves of oil, gas, and coal are still abundant. <br> a. True <br> b. False
tiny-mole [99]
I think the answer must be True! Because the scientist are uncertain of how long the resources will be last. Hope it helped you!  Have a great day! :)
3 0
3 years ago
The Doritos advertising effort of "Live Mas," which is Spanish for "Live More," is meant to suggest a lifestyle aspiration. If c
vagabundo [1.1K]

Answer:

C

Explanation:

The consumers associated the saying with the Doritos brand.

7 0
3 years ago
April runs a small shop where she provides a service. She is able to process an average of 11 customers per hour. An average of
professor190 [17]

Answer:

5. Po= 0.36

6. Pn = 0.04

7. 0.16

8. 1.11

9. 1.75

10. 9.9

Explanation:

5. Computation for the probability that April will not be working with a customer

Using this formula

Po=1-(Average number of arrival per hour/Average number of customer served per hour)

Let plug in the formula

Po= 1-(7/11 )

Po=1-0.64

Po= 0.36

Therefore the probability that April will not be working with a customer will be 0.36

6. Calculation for the probability of 5 customers in the system

Using this formula

Pn= (Average number of arrival per hour/Average number of customer served per hour)* Po

Let plug in the formula

Pn= (7/11)^5* 0.36

Pn=0.104358*0.36

Pn=0.037

Pn = 0.04 (Approximately)

Therefore the probability of 5 customers in the system will be 0.04

7. Calculation for the average time a customer spends waiting in line

Time spend Waiting in line=7^2/11(11 – 7) /7

Time spend Waiting in line=(49/44)/7

Time spend Waiting in line = 1.11/7

Time spend Waiting in line= 0.16

Therefore the average time a customer spends waiting in line will be 0.16

8. Calculation for the average number of customers waiting in line

Customers waiting in line = 7^2/11(11 – 7)

Customers waiting in line=49/44

Customers waiting in line= 1.11

Therefore the average number of customers waiting in line will be 1.11

9. Calculation for the average number of customers in the system

Average customers in the system= 1.11 +(7/11)

Average customers in the system= 1.11 +0.64

Average customers in the system = 1.75

Therefore the average number of customers in the system will be 1.75

10. Calculation for the arrival rate in order for April to stay that busy

Arrival rate = 0.9 * 11

Arrival rate = 9.9

Therefore the arrival rate in order for April to stay that busy will be 9.9

4 0
2 years ago
Sunny corporation reported the following results for december: Description AmountNumber of units sold 800 unitsSelling price per
Llana [10]

Answer:

The gross margin for December is: 0.5%.

The Gross margin of an organisation or business measure the extent by which its income exceeds the costs it incurs in producing its goods and or services.  

The gross margin is measured in percentages. The higher the percentage of this margin, the higher the effectiveness of the company's management in deriving value from every dollar invested.

Explanation:

To arrive at Gross Margin, one is required to subtract the total cost of goods sold from total revenue for the period and dividing that number by revenue. That is:

Gross Margin (GM) = \frac{Revenue-Cost of Goods Sold}{Revenue}

Step I - Calculate Revenue

This is given as the total amount of goods sold which is:

800 x $500 = $400,000

Step II - Calculate Cost of Goods Sold

Cost of goods sold per unit is given as

$250 per unit.

Total Cost of Goods sold therefore is

800 x $250 = $200,000

Step III - Calculate Gross Margin

= \frac{400,000-200,000}{400,000}

= \frac{200,000}{400,000}

= \frac{1}{2} or 0.5%

Cheers!

7 0
3 years ago
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