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Molodets [167]
3 years ago
12

Chelsea Fashions is expected to pay an annual dividend of $1.26 a share next year. The market price of the stock is $24.09 and t

he growth rate is 2.6 percent. What is the cost of equity
Business
1 answer:
tekilochka [14]3 years ago
6 0

Answer:

7.83%

Explanation:

This is calculated by using the Gordon growth model (GGM) formula as follows: P = d / (r - g) ……………………………………… (1)

Where;

P =  market price of the stock = $24.09

d = next year annual dividend = $1.26 r = cost of equity = ?

g = dividend growth rate = 2.6%, or 0.026

Substituting the values into equation and solve for r, we have:

24.09 = 1.26 / (r - 0.026)

24.09 (r - 0.026) = 1.26

24.09r - 0.62634 = 1.26

24.09r = 1.26 + 0.62634

24.09r = 1.88634

r = 1.88634 / 24.09

r = 0.0783038605230386, or 7.83038605230386%

Rounding to 2 decimal places. we have:

r = 7.83%

Therefore, the correct option is 7.83 percent.

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Suppose the Board of Directors of The Staten Island Suppliers Co. announces on October 4th that the regular quarterly dividend o
kipiarov [429]

Answer:

a. October 4th

b. November 15th 2019

c. November 14th 2019.

d. December 13th, 2019 (Note: This is assumed based on the explanation below as it is not specifically stated in the question).

Explanation:

a. What date is the declaration date?

The declaration date is the date the announcement to pay the next dividend is made by the board of directors of a company. In this case, the declaration date is October 4th, 2019.

b. What date is the holder of record date?

The holder of record date refers to the cut-off date set by a company to ascertain the eligible shareholders that will receive the next dividend payment. In this case, the holder of record date is November 15th 2019.

c. What date is the ex-dividend date?

The ex-dividend date refers to date that a seller of stock is still eligible to receive dividend despite that the stock has already been sold to a by him. This is because it is the person that hold the security on the ex dividend date that will receive the dividend payment not the holder on the payment date. Generally, ex-dividend date is usually one business day before the record date. In this case,he ex-dividend date is November 14th 2019.

d. What date is the payment date?

The payment date refers to the actual day that eligible shareholders are paid the declared dividend by the company. It is usually a few weeks or month after the ex-dividend date. If we assumed to be a month, the payment date would be December 13th, 2019.

6 0
4 years ago
What is a example of a withholding you might see on your pay stub?
Studentka2010 [4]
This is called the withholding tax or income tax. Every employee has to pay tax for every income made which is directly credited by the employer for the government. Withheld tax within the year is reflected in the Income tax return alongside with other income and assets where then you can apply for exceptions or discounts. If withheld tax is over the supposed tax then it will be refunded.
4 0
4 years ago
What is a business analytics specialist who uses visual tools to help people understand complex data? Multiple Choice
bulgar [2K]

Answer:

The correct answer is b) Data artist

Explanation:

A data artist is an expert who creates graphs, charts and other visual tools that help people understand the complex data of a business.

3 0
3 years ago
An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accide
k0ka [10]

Answer:

$100,000

Explanation:

In the case of joint life policy, the other person who is covered in the policy has the right to claim the amount after death of one person

In the given case, the husband has died after 8 years of purchasing the joint-life policy due to an automobile accident. So, the wife has the right to claim for the policy amount i.e $100,000. This claim is valid for the only first death

3 0
3 years ago
The best indicator of how well a company's strategy is working is whether the company is
Cloud [144]

Answer:

attaining its objectives      

Explanation:

The organization objectives are tangible and explain clearly the activities necessary to accomplish a mission. Objectives define the strategies that your company will use to attain commercial success, quality of customer care, promotional incentives and any other tangible goals.

In other phrases, a company objective is a consequence a corporation is trying to accomplish. It also involves the techniques individuals will need to get to this place. A business goal typically includes a time period and profiles the existing resources.

3 0
4 years ago
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