Answer:
Payout ratio =1- 12.96%*45%*9/1.4 = 0.6252 or 62.52%
Explanation:
WACC = Weight of Equity * Cost of Equity + Weight of Debt * (1-Tax rate) * Cost of Debt
16% = 45%* Cost of Equity + 55%*(1-40%)*9%
16%-55%*(1-40%)*9% = 45%*Cost of Equity
Cost of Equity = 28.9556%
Current price of Stock = D1/(Cost of Equity - Growth)
25 = 4/(28.9556%-Growth)
Growth = 28.9556%-4/25 = 12.96%
ROE = Net income/Equity = 1.4/(45%*9)
Growth rate = (1- Payout ratio)*ROE
12.96% = (1-Payout ratio)* 1.4/(45%*9)
Payout ratio =1- 12.96%*45%*9/1.4 = 0.6252 or 62.52%
Answer: $42,400
Explanation:
The family currently spends $40,000 on living expenses.
Inflation is expected to be 6% and as Inflation is used to refer to the general rise in prices, this means that the family will be spending 6% more in one year.
They will therefore be spending;
= 40,000 * (1 + 6%)
= $42,400
Answer:
32.88%
Explanation:
For computing the rate we need to apply the RATE formula i.e to be shown in the attachment below:
Given that,
Present value = $42,000
Future value or Face value = $0
PMT = $4,154.50
NPER = 12 months
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after applying this above formula, the rate is
= 2.74% × 12 months
= 32.88%
The three activities that are part of the function of accounting from the list of given options are:
- 2. classifying financial transactions
- 4. interpreting financial transactions
- 5. recording financial transactions
<h3>What is Accounting?</h3>
This refers to the term that is used to describe the process of recording financial transactions and also classifying them into proper categories for record purposes.
Hence, it can be seen that from the list of answer choices, when it comes to the area of accounting, three core functions from the list are given above and one of them is classifying financial transactions
Read more about accounting here:
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