Answer:
The cost of internal equity is 11.18%
Explanation:
The constant growth model of DDM can be used to calculate the price of a stock if the growth rate in the dividend is expected to remain constant. The DDM values the stock based on the present value of the expected future dividends from the stock.
The formula for price today under DDM is,
P0 = D0 * (1+g) / r - g
We already know the P0, the D0 and the g. We can plug in these values in the formula to calculate r which is the cost of equity capital.
32 = 1.25 * (1+ 0.07) / (r - 0.07)
32 * (r - 0.07) = 1.3375
32r - 2.24 = 1.3375
32r = 1.3375 + 2.24
r = 3.5775 / 32
r = 0.11179 or 11.179%
In 2018, Boeing paid its Washington state employees nearly $600 million in bonuses.----> both economic and accounting profits
In 2018, Amazon opened its new office building in downtown Seattle. Instead of using the new office space itself, Amazon could have rented out the space to local companies for $50,000 per floor per year.--->economic profits only
Nordstrom pays $50 per square foot to lease space in a shopping mall.--->both economic and accounting profits
Anna, the owner of a local bike repair shop, uses her time to operate her business instead of earning an annual salary of $100,000 at the Ford Motor Company.----> economic profits only
<h3>What are
economic profits?</h3>
Generally, The difference between the income obtained from the sale of a product and the costs of the inputs utilized, in addition to any opportunity costs, determines whether an economic activity results in a profit or loss.
When determining the level of economic profit, the amount of revenue received is subtracted from both the opportunity costs and the explicit expenses.
Read more about economic profits
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CQ is attached below
Answer:
To serve infant and toddlers
Explanation:
Early head is a great initiative which is funded by federal government for low income family. It aims to serve infants, toddlers and pregnant women's. This service is generally provided to those families which are having low income. It plays a vital role in social development and cognitive skills which are important for the children's at early stage of their lives.
Answer:
April 11th
Explanation:
the dividends will be paid to the owner of the share one day before the record. This is defined asthe Ex-date ofthe dividends.
DISCLAMER
Assuming it refers to 2019 Apil 12th
the previous business day will be April 11th (we should liook into the calendar and avoid counting Friday and saturdays
for the year 2019 April 12th is a friday so it is okay to define it as April 11th
Answer:
The cost of equity is 13.94%
Explanation:
The cost of equity of the required rate of return (r) is the the minimum level of return that the investor will require to invest in a stock of equity based on its risk. The required rate of return of a stock can be calculated using the CAPM approach. The formula for required rate of return is:
r = rRF + Beta * (rM - rRF)
Where,
- rRF is the risk free rate
- Beta is the stock's beta or measure of risk/volatility
- rM is the expected return on the market
r = 6.1% + 1.6 * (11% - 6.1%) = 13.94%
