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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%

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If you can invest $1,000 today and it will grow to be worth $1,350 over the next 6 years, what is the compound annual return you
Roman55 [17]

Answer:

5.13%

Explanation:

Given:

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Substituting the values, we get =RATE(6,-1000,1350)

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Mario owns a store that sells skateboard equipment. Mario understands that people are most likely to notice his headline text in
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6 0
3 years ago
A project manager may also be the project champion. true
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The Richmond Corporation uses the weighted-average method in its process costing system. The company has only a single processin
Digiron [165]

Answer:

$95,400

Explanation:

Step 1 : Find  the equivalent units of production in Ending Work in Progress

Materials = 18,000 x 100 % = 18,000 units

Conversion costs = 18,000 x 60 % = 10,800 units

Step 2 : Calculate the Cost of units in Ending Work in Progress

Cost of units in Ending Work in Progress = 18,000 x $2.75 + 10,800 x $4.25

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