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cricket20 [7]
3 years ago
6

A firm has just paid its annual dividend of $5.64 a share. Thereafter the dividend is expected to increase at a rate of 2% a yea

r. If the firm's stock currently sells for $60 a share, what is the cost of equity
Business
1 answer:
hammer [34]3 years ago
7 0

Answer:

11.588 %

Explanation:

The information available allows us to use the Dividend Growth Model to calculate the cost of equity as :

Cost of equity =  Expected dividend ÷ Price per share + growth rate

therefore,

Cost of equity = ($5.64 x 1.02) / $60 + 2 %

                        = 11.588 %

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Farm workers in Oaks Farmville face a 1/85 probability of death at work and each of them receives a yearly wage of $159,106. Far
Lostsunrise [7]

Answer:

$154,182.02

Explanation:

Probability of Farm workers in ( O.F ) facing death at work = 1/85 = 0.012

Probability of Farm workers in ( V.F ) facing death at work = 1/127 = 0.008

Value of a statistical life = $1,262,558

<u>Determine how much  the workers in less risky job should get paid </u>

The less risky job is working in Valley farm(V.F ) with a death probability of = 1/127 = 0.008

The more risky job is working in valley farm ( probability = 1/85 = 0.012 )

Yearly wage of risky job = $159106

payment for less risky job can be calculated using the relation below

statistical life = ( cost incurred to reduce risk) / ( percentage of risk to death reduced )  ---------------- ( 1 )

cost incurred to reduce risk =  yearly wage to high risk workers - yearly wage to low risk workers

 =  159106 - X

percentage of risk to death reduced = (probability of death to high risk workers) - ( probability of death to low risk worker )

= 1/85 - 1/127 = 0.0039

back to relation 1

1262558 = ( 159106 - X ) / ( 0.0039)

159106 - X = 1262558 ( 0.0039 )

hence X ( amount to be paid to workers in the less risky job )

X = 159106 - 4923.9762 = $154,182.02

7 0
3 years ago
Winston Company’s high and low level of activity last year was 60,000 units produced in April and 20,000 units produced in Decem
horsena [70]

Answer:

Total cost= $36,000

Explanation:

Giving the following information:

Winston Company’s high and low level of activity last year was 60,000 units produced in April and 20,000 units produced in December. Machine maintenance costs were $52,000 in April and $20,000 in December.

<u>To calculate the total cost, first, we need to calculate the unitary variable cost. With the unitary variable cost, we can calculate the fixed costs. Then, the total cost at 40,000 units.</u>

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (52,000 - 20,000) / (60,000 - 20,000)= $0.8 per unit

Now, we calculate the fixed costs:

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 52,000 - (0.8*60,000)= $4,000

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 20,000 - (0.8*20,000)= $4,000

Total cost= 4,000 + 0.8*units

Total cost= 4,000 + 0.8*40,000= $36,000

5 0
3 years ago
Evans Products uses a process costing system with two processing departments: the Mixing Department and the Finishing Department
avanturin [10]

Answer:

d. A debit to Work-in-Process Inventory, Finishing Department of $140,000.

Explanation:

Cost of unit transferred = $4 x 35,000 = $140,000

Cost incurred by mixing department is $4 which so the transfer of cost from mixing department to finishing department will be $140,000 for 35000 units. This cost will be recorded in the work in process inventory account of finishing department. As we know that WIP account has debit nature so same entry will be done to record an expense incurred in mixing department.

4 0
3 years ago
In capitalism, what does competition do for consumers?
borishaifa [10]

It keeps prices fair for consumers who are trying to buy there products.


- R3KTFORGOOD ☕

7 0
3 years ago
Robyn's Retail had 500 units of inventory on hand at the end of the year. These were recorded at a cost of $19 each using the la
podryga [215]

Answer:

Credit inventory 1000 and debit COGS 1000

Explanation:

19*500=9500 <price it is recorded at currently

The rule requires lower cost - market vs. price. Since market cost is lower, you  have to find out how much the ending inventory balance should be

17*500=8500

9500-8500=1000

The inventory booked should be lowered, thus requiring credit entry of 1000. Since it is a merchandise loss, it is counted towards cost of goods sold expense, thus debit

8 0
3 years ago
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