Answer:
the effective rate of interest on the debt is 6.38%
Explanation:
The computation of the effective rate of interest on the debt is shown below:
Effective rate of interest is
= ($400,000 × 6%) ÷ ($400,000 × 0.94)
= $24,000 ÷ $37,600
= 6.38%
Hence, the effective rate of interest on the debt is 6.38%
It could be determined by applying the above formula so that the correct rate could come
Answer:
The price of the stock today is $42.94
Explanation:
The price of a stock whose dividends are expected to grow at a constant rate is calculated using the constant growth model of Dividend Discount model approach. It bases the price of the stock on the present value of the expected future dividends. The price today under this model is calculated as follows,
P0 = D0 * (1+g) / r - g
Where,
- D0 * (1+g) is the D1 or the dividend for the next year
- r is the required rate of return
- g is the growth rate in dividends
P0 = 4 * (1+0.052) / (0.15 - 0.052)
P0 = $42.938 rounded off to $42.94
Answer:
Indirect
Direct
Iindirect
Explanation:
Direct cost is the cost that can be traced back to the cost object whereas the indirect cost cannot be traced back. Cost object is something to which the costs are assigned. in this case the cafeteria workers are directly working with the cost object:Frozen pizza plant, hence the cost is directly associated with that. Janitorial supplies and property insurance cost does not directly relate to The cost object given here so it will be classified as indirect cost.
Answer:
the firm's ROE is 20%
Explanation:
The tax burden is 0.9
The interest burden is 0.6
The return on sales margin is 13%
The turnover ratio is 2.62
The leverage ratio is 1.1
Calculate the ROE
ROE = 0.9 * 0.6 * 0.13 * 2.62 * 1.1
=0.2 or 20%
