1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
uranmaximum [27]
3 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]3 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%

You might be interested in
Andrew opened a fast-food restaurant on the corner of First and Main Streets in a small town. He named the restaurant The Hambur
schepotkina [342]

Answer:

Undifferentiated

Explanation:

Andrew has applied an undifferentiated marketing mix approach. The undifferentiated techniques is a type of marketing mix approach that centres around a whole target market. This procedure utilises a single marketing mix which consists of one item, one value, and one situation . This approach is initiated to attain maximum customers in a specific target market within a short spam of time.

7 0
3 years ago
416,000 people each receive an average refund of $3,600, based on an interest rate of 3 percent, what would be the lost annual i
victus00 [196]

Answer:

$44,928,000

Explanation:

The fact that 416,000 received a refund of $3,600 each means that the tax authority would lose the interest income that could have been generated on the total refund amount based on a 3% interest rate of return.

Lost annual income=number of people who got refund*average refund per person*interest rate of return

number of people who got refund=416000

average refund per person=$3,600

the interest rate of return=3%

Lost annual income=416,000*$3,600*3%

Lost annual income=$44,928,000  

6 0
3 years ago
Tempest Enterprises began operations on January 1, 20x1, with all of its activities conducted from a single facility. The compan
Ray Of Light [21]

Answer:

100% will be included in the Income Statement

Explanation:

Always remember that the depreciation calculated for the accounting period can be apportioned as per the International Accounting Standard IAS 2, which says that expenses must be classified in a manner that results in the truth & fairness of the Financial Statements. This means that if depreciation calculated is $500 then the whole of this depreciation will be expensed out in the income statement. It's 20% might go to selling activities, 35% to administrative activities, and 45% to manufacturing activities.

<h3><em>B</em><em>ut remember that the depreciation calculated for the accounting period would be expensed out by $500 in the income statement, for the period generated.</em></h3>
3 0
3 years ago
Since 1960, when the central american beef market began booming, over 25% of the rainforests have been cleared for cattle grazin
faust18 [17]
Since 1960, when the Central American beef market began booming, over 25% of the rainforests have been cleared for cattle grazing is a TRUE statement.
4 0
3 years ago
Click this link to view O*NET’s Work Styles section for Executive Administrative Assistants. Note that common work styles are li
statuscvo [17]

Answer:

1,2,5,6

Explanation:

Edge 2021

Hope this Helps! :)

3 0
3 years ago
Other questions:
  • HELPPP!!!!
    15·2 answers
  • 2. You have just completed an analysis of Rodriguez Manufacturing. You used the Capital Asset Pricing Model to determine that th
    5·1 answer
  • Michelle Townsend owns stock in National Computers. Based on information in its annual report, National Computers reported after
    10·1 answer
  • Fact Pattern: Conner purchased 300 shares of Zinco stock for $30,000 in 1994. On May 23, 2013, Conner sold all the stock to his
    11·1 answer
  • True or False: Employees and entrepreneurs experience stress and need to know how to manage
    11·1 answer
  • Q has a traditional whole life policy with a $10,000 face amount, a $5,000 cash value, and a $4,999 policy loan and loan interes
    7·1 answer
  • Grade<br> Age<br> Favorite food........
    13·2 answers
  • Which change was applied to the original paragraph? It was justified. It was left aligned. It was right aligned. It was centered
    15·2 answers
  • Strategic business units that have a relatively low market share but have the potential to grow are best categorized under _____
    11·1 answer
  • Suppose ABCD's stock price is currently $50. In the next six months, it will either fall to $40 or rise 8 to $60. What is the cu
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!