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
Strike441 [17]
3 years ago
15

Commercial Construction Builders has a beta of 1.34, a dividend growth rate of 2.1 percent for the foreseeable future, a stock p

rice of $15 per share, and an expected annual dividend of $0.45 per share next year. The market rate of return is 12.8 percent and the risk-free rate is 4.2 percent. What is the firm's average cost of equity?​
Business
1 answer:
Effectus [21]3 years ago
7 0

Answer:

10.412%

Explanation:

The computation of the average cost of equity of the firm is shown below;

The Cost of equity as per CAPM is

= risk free rate + beta × (market rate - risk free rate)

= 4.2 + 1.34 × (12.8 - 4.2)

= 15.724%

Now the Cost of equity as per growth model is

= (D1 ÷ Current price) +Growth rate

= [0.45 ÷ 15] + 0.021

= 5.1%

Now the Average Cost of equity is

= (15.724 + 5.1) ÷ 2 2

= 10.412%

You might be interested in
The company that Don owns, the Ardmore General Store, is a family-owned company that has been in business for more than 100 year
nadya68 [22]

Answer:

The answer is A. corporate social responsibility

Explanation:

Corporate Social Responsibility is a commitment by a business to behave ethically and contribute to economic development while improving the quality of life of its workforce and society as a whole.

5 0
3 years ago
in the final​ analysis, how much did the inventory cost burlington​? the inventory cost for burlington is
nata0808 [166]

The inventory cost for burlington is $18,278.

Stock or inventory refers to the goods and substances that a commercial enterprise holds for the last purpose of resale, manufacturing or utilisation. stock control is a area primarily approximately specifying the shape and site of stocked goods.

Stock refers to all of the items, goods, merchandise, and substances held by means of an enterprise for selling in the marketplace to earn a profit. example: If a newspaper supplier makes use of a car to supply newspapers to the customers, handiest the newspaper might be taken into consideration stock. The automobile will be handled as an asset.

Learn more about inventory here:brainly.com/question/24868116
#SPJ4

8 0
9 months ago
Matty Kaminsky owns a new Volvo. His June monthly interest is $400. The rate is 8 ½%. Matty's principal balance at the beginning
Nesterboy [21]

Answer:

$56,470.59

Explanation:

We need to calculate the principal amount  at the beginning of June

Data:

Interest (I) = $400

Rate(r) = 8.5%

Time(t) = 360 days

Solution:

We can calculate the principal amount by rearranging the Interest calculation formula

Formula: I = Prt

Note; Where P in the formula is the principal amount

Now rearrange the formula in order to find principal

P = I/rt

P = $400/(0.085)x(30/360)

P = $400/(0.085)x(0.08333333333333)

P = $400/(0.00708333333333

P = $56,470.59

Note: we only need to find the principal balance of June so we will consider only 30 days of June out of 360 days.

5 0
3 years ago
RST Company produces a product that has a variable cost of $6 per unit. The company's fixed costs are $30,000. The product sells
Anni [7]

Answer: $75000

Explanation:

In order to solve the question, firstly we need to calculate the contribution margin ratio which will be:

= ($10 - $6) / $10

= 40%

Then, the break even sales will then be:

= Fixed cost / Contribution margin ratio

= $30000 / 40%

= $75000

Therefore, the break-even point in sales dollars is $75000

5 0
3 years ago
DeKay Dental Supplies issued $10,000 of bonds on January 1, 2018. The bonds pay interest semiannually. This is a partial bond am
svp [43]

Answer: d. 8.0%

Explanation:

The Stated Annual Rate of Interest on a bond refers to the coupon rate which is the amount that the company promises to pay on the bond pay period.

Looking at the question, the company is paying $400 every 6 months on the $10,000 bonds . The interest therefore is;

= 400/10,000

= 4%

Company pays 4% on the bonds every 6 months.

This 4% should be stated in annual terms so;

= 4% * 2

= 8%.

7 0
3 years ago
Other questions:
  • It is generally agreed internationally that the one thing that can most readily undermine equity, efficiency and integrity in th
    10·1 answer
  • Medicare deduction is withheld at a standard rate of 1.45 percent. suppose your gross pay this week is $750. how much medicare t
    14·1 answer
  • The range rule of thumb roughly estimates the standard deviation of a data set as​ _______.
    11·1 answer
  • Andrew owns land (adjusted basis of $94,400) that he uses in his business. He exchanges the land and $47,200 in cash for a diffe
    8·1 answer
  • While it sounds reasonable that companies should focus on making the products it knows how to make really well, one downside of
    9·1 answer
  • If overhead is applied using traditional costing based on direct labor hours, the overhead application rate is:
    10·1 answer
  • A client with a high risk tolerance anticipates that the market will remain flat for the next 3 months. Which position would pro
    8·1 answer
  • Sexton, Corp., has projected the following sales for the coming year: Q1 Q2 Q3 Q4 Sales $ 860 $ 940 $ 900 $ 1,000 Sales in the y
    12·1 answer
  • Economist Thomas Piketty criticized executive compensation levels and thought CEOs should be satisfied with:
    15·1 answer
  • Suppose a drought in australia has seriously impaired agricultural productivity. How would that impairment in productivity affec
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!