Answer:
rs=14.68%
F=15%
re=16.56%
Explanation:
using the constant growth model:
where P0 is the current stock price
D1 is the dividend expected at the end of the 1st year
rs is cost of retained earnings.
Rearranging to make rs subject of the formula:
if Evanec issues new stock, they will only net $31.45 down from $37 per share due to floatation costs. The difference, ie $37-$31.45 = $5.55 is due to floation costs.
The percentage floatation costs (F) are 
alternatively, one can recognise that 
and F = 15%
Cost of new common stock re is calculated as follows:
Answer:
21.42
Explanation:
rE= Div1 / P0+ g
= 3.00/ 25.50 + .04
= 0.15% or 15%
Solve for new stock price:
P0= Div1 / (rE- g)
= 1.50/ (0.15- .08)
=1.50/0.07
= 21.42
Therefore assuming that JRN's risk is unchanged by the expansion, the value of a share of JRN after the announcement is closest to: 21.42
Answer: (1) $5,290
(2) $3,470
Explanation:
Net Income from Accrual method:
= Served a banquet account - received and paid electricity bill + Received cash meals to customers - Accrued salary expense - Prepaid insurance expired
= $2,810 - $140 + $3,610 - $800 - $190
= $5,290
Net Income from Cash method:
= Received cash meals to customers - received and paid electricity bill
= $3,610 - $140
= $3,470
Answer:
$14,400
Explanation:
Given that,
Net cash provided by operating activities = $39,000
Net cash used for investing activities = $26,000
Net cash provided by financing activities = $1,400
The net change in cash during the year:
= Net cash provided by operating activities - Net cash used for investing activities + Net cash provided by financing activities
= $39,000 - $26,000 + $1,400
= $14,400
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