Using the dividend growth model, an analyst has estimated that her company’s cost of equity capital is 12% per annum. The current ex-dividend share price is R232.4, and the current dividend is 11 cents per share. Do calculations to show what rate of dividend growth the analyst is assuming.
Q: A machine costing $210,200 with a four-year life and an estimated $19,000 salvage value is installed…
A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…
Q: d. What amounts will Mega Mart report on the 2010 W-2s for each employee?
A: SOLUTION:- Amount will Mega Mart Report On 2010 W-2s For Marsha:- AMOUNT AMOUNT…
Q: CompuWatch Inc. produces wrist-worn tablet computers. The company uses Thin Film Crystal (TFC) LCD…
A: Lets understand the basics. Direct material price variance is a variance between the rate at which…
Q: Father, age 67, owns 84% of the common shares of Opco. Mother owns 8%. The remaining 8% is owned by…
A: Dividend refers to the amount of money or the rewards that are paid to the shareholders of the…
Q: Following is a table for the present value of $1 at compound interest: Year 6% 10% 1 0.943 0.909 2…
A: The present value of a single future value amount is calculated by the following formula: If the…
Q: Carbon Company provides the following information about resources. Unused Resources Capacity Cost…
A: The income statement refers to the statement of finance that is helpful in showing the income and…
Q: There are some excellent free personal finance apps available: Mint.com, GoodBudget, Mvelopes,…
A: A note is a formal instrument that expresses an obligation to repay a debt to a creditor or an…
Q: Manatee Corporation wants to withdraw $500,000 (including principal) from an investment fund at the…
A: Present Value Given a certain rate of return, the present value (PV) of a future amount of money or…
Q: Management accounting- mergers and aquisitions Mergers are often categorised as horizontal, vertical…
A: A horizontal merger is a merger between two companies that operate in the same industry and at…
Q: Determine the amount that pretax income would increase (decrease) in Year 2 as a result of the…
A: Given in the question: Date of Purchase January 1, Year 1 Number of Shares purchased…
Q: 2. Assume in Year 4 that the company's variable costing net operating income was $260,000 and its…
A: Introduction:- There are two major methods in manufacturing firms for valuing inventory for…
Q: 20. Refer to the Price-Promotion matrix. Your team decides to use a selling price of $12.00 per unit…
A: Ans. For selling products, promotion is done so that the consumers will come to know about the…
Q: To enter transactions in QBO: a. From the Navigation Bar, select Reports b. From the (+) New icon,…
A: QBO is a cloud based financial management software it is designed to slash the time you spend…
Q: Tax functions that accounting and finance professionals may assist clients with include all but the…
A: Lets understand the all the terms. Tax compliance means a following set of rules of the tax for…
Q: Which of the following indicates that a decision has precedential value for future cases?
A: Temporary book-tax differences arise when there is a difference between the amount of income or…
Q: Inventory Write-Down Palmquist Company has five different inventory items and applies the inventory…
A: FIFO is an abbreviation for first in, first out. It is a method for handling data structures where…
Q: If money can be invested at 4.4% compounded quarterly, which is larger, $8177 now or $11,000 in 7…
A: The time value of money is a concept of money that says money is worth it now, not money received in…
Q: What is the company's current breakeven in units and in dollars? 2. If the company expects to sell…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Current Attempt in Progress Sheridan Inc. reported the following for 2023: Sales Revenue Cost of…
A: The comprehensive income statement is a combined financial statement that indicates standard income…
Q: Beginning inventory, purchases, and sales data for DVD players are as follows: Date Line Item…
A: The inventory can be valued using various methods as FIFO, LIFO and average method. The LIFO method…
Q: Sanders Inc. has applied $567,988 of overhead to jobs. Actual overhead at the end of the year is…
A: UNDERAPPLIED MANUFACTURING OH Underapplied manufacturing OH is Calculated When Actual OH is…
Q: Project A has $100,000 investment and will produce a return of $80,000 for end of years 1 and 2,…
A: Net present worth is an important tool of capital budgeting. It is essentially the sum of present…
Q: What are ethical principles in auditing
A: Financial statement audits or independent reviews and evaluations of a company's financial…
Q: What is information risk when it pertains to auditing?
A: Audit involves risk that the auditor expresses an inappropriate audit opinion when the financial…
Q: o Files Company is the chief competitor of Cover-to-Cover Company in the bookshelf business. Biblio…
A: "Since you have asked multiple questions, we will solve first question for you. If you want any…
Q: May I ask what the words say for parts a, b, and g?
A: In equation method entry total asset side should be equal to total of liabilities and equity side.
Q: Darwin Company reports the following information: Sales Direct materials used Depreciation on…
A: Product cost is the total of direct and indirect manufacturing cost
Q: A machine has a first cost of P50,000 with interest rate of 10% annually. Expected salvage value…
A: Depreciation is the total loss in value of an asset over the life of the asset. The value of asset…
Q: s a fraction in lowest terms or a decimal rounded to the nearest millionth. Employees on Nonfarm…
A: Payroll refers to the form of a defined having the details of the employees of a company who are…
Q: Bondholders are _______________________ rather than owners of the corporations. A. creditors…
A: A bond is issued by the company for raising finance for the business working. It is considered a…
Q: Assume the following information for Skysong Corp. Accounts receivable (beginning balance) Allowance…
A: Writing off Uncollectible Receivables: Eliminating an uncollectible accounts receivable from the…
Q: Trustees must not just act honestly. They must be prudent and exercise the degree of care which they…
A: A trustee seems held to a high level of duty of care. A trustee should administer the trust's…
Q: LO 4 Exercise 10-15A Straight-line amortization of a bond discount Farm Supplies, Inc., issued…
A: Interest is defined as any compensation made to the party from whom money has been taken on credit.…
Q: On January 1 of the current year, Rhondell Corporation has accumulated E & P of $70,000. Current E &…
A: Earnings and Profits (E&P) is the measure of the ability of a corporation to pay its'…
Q: Assume that the delivery truck is not a luxury auto. Calculate Way Corporation's 2022 depreciation…
A: SOLUTION:- Way Corporation Depreciation is calculated as below:- Asset Original Basis ($) Rate…
Q: LO.5 Cindy maintains an office in her home that comprises 8% (200 square feet) of total floor space.…
A: calculation of Cindy's office in the home deduction under regular method and simplified method are…
Q: Room 1 has 50,000 square feet of rentable space. Room 2 account for 30,000 square feet and lobby…
A: Overhead means the amount of expenses incurred indirectly to produce the goods. These expenses can…
Q: The total factory overhead for Big Light Company is budgeted for the year at $1,703,240. Big Light…
A: Lets understand the basics. Single plantwide overhead rate is a overhead rate calculated to allocate…
Q: Sturdy Manufacturing Co. assembled the following cost data for job order #23: OA. $194,500 O B.…
A: Working :- 1) Calculation of manufacturing overhead applied :- Indirect manufacturing labor +…
Q: The Matrix Company has three product lines of belts—A, B, and C—with contribution margins of $7, $5,…
A: Break even point means a situation where the is neither profit nor loss. Sales revenue is sufficient…
Q: LO 1 Exercise 11-1A Effect of accounting events on the financial statements of a sole proprietorship…
A: Income Statement :— It is one of the financial statement that shows profitability of company during…
Q: Enter the following information into a manual journal with credits/debits:
A: The accrual basis of accounting is the method by which revenues and expenses are recognized when…
Q: Inventory Costing Methods-Periodic Method The following information is for the Bud Company; the…
A: First-in-First-out Method - Under this method inventory that is brought at the earlier date is sold…
Q: What is the definition of assurance and non assurance services
A: Assurance services are much less formal than financial statement attestation services. Non-assurance…
Q: Pearce Company uses the FIFO method in its process costing system. The Mixing Department started the…
A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: In 2022, Nitai (age 40) contributes 10 percent of his $123,000 annual salary to a Roth 401(k)…
A: Because contributions to Roth IRAs are made with money that has already been taxed, there is no…
Q: Which of the following statements regarding the tax deductibility of points related to a home…
A: The home mortgage industry typically uses two types of points, origination points and discount.…
Q: Cash in hand means
A: CASH IN HAND Cash in Hand are Shown under the Current Assets in The Balance Sheet of the…
Q: Barney Stinson, a legal advisor at Goliath Bank, is under intense pressure at work to ensure that…
A: Target profit = $250,000 Target contribution margin = Target profit + Fixed cost Contribution…
Q: Polar Inc. has a taxation year end of December 31. On January 1, 2021, the following information…
A: Taxation is the process through which a government or taxation body imposes or levies a tax on its…
Using the dividend growth model, an analyst has estimated that her company’s cost of equity
capital is 12% per annum. The current ex-dividend share price is R232.4, and the current dividend
is 11 cents per share. Do calculations to show what rate of dividend growth the analyst is
assuming.
Step by step
Solved in 2 steps
- As the assistant to the CFO of Johnstone Inc., you must estimate its cost of common equity. You have been provided with the following data: D0 = $0.80; P0 = $22.50; and gL = 8.00% (constant). Based on the dividend growth model, what is the cost of common from reinvested earnings? 10.69% 11.25% 11.84% 12.43% 13.05%An analyst has gathered the following information for the Oudin Corporation: Expected earnings per share = €5.49 Expected dividends per share = €2.13 Dividends are expected to grow at 2.53 percent per year indefinitely The required rate of return is 7.74 percent Based on the information provided, compute the price/earnings multiple for Oudin (Enter your answer as a number with two decimal places, like this: 12.34)Assume that you are a consultant to Broske Inc., and you have been provided with the following data: the next expected dividend is $0.67; the current market price is $42.50 and the constant growth rate for the dividends is 8.00% Based on the information given what is the cost of equity?
- Red, Inc., Yellow Corp., and BlueCompany each will pay a dividend of $2.35 next year. The growth rate in dividendsfor all three companies is 5 percent. The required return for each company’s stockis 8 percent, 11 percent, and 14 percent, respectively. What is the stock price foreach company? What do you conclude about the relationship between the requiredreturn and the stock price?EXO'stock sells for $23.06, its next expected dividend is $1.20 and analyst expect its growth rate to be 8.3%. What is Exo's required rates of return? Express your answer in percentage.The Evanec Company's next expected dividend, D1, is $3.08; its growth rate is 4%; and its common stock now sells for $39.00. New stock (external equity) can be sold to net $31.20 per share. a. What is Evanec's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places. rs b. What is Evanec's percentage flotation cost, F? Round your answer to two decimal places. F = % c. What is Evanec's cost of new common stock, re? Do not round intermediate calculations. Round your answer to two decimal places. re = %
- The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 4% per year. Callahan's common stock currently sells for $26.75 per share; its last dividend was $2.00; and it will pay a $2.08 dividend at the end of the current year. a. Using the DCF approach, what is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. % b. If the firm's beta is 1.5, the risk-free rate is 4%, and the average return on the market is 13%, what will be the firm's cost of common equity using the CAPM approach? Round your answer to two decimal places. % c. If the firm's bonds earn a return of 11%, based on the bond-yield-plus-risk-premium approach, what will be rg? Use the judgmental risk premium of 4% in your calculations. Round your answer to two decimal places. d. If you have equal confidence in the inputs used for the three approaches, what is your estimate of Callahan's cost of common equity? Do not round…Aboudy Corporation's stock price is currently $22.00 per share. The company has just paid a dividend of $0.55 per share, and shareholders anticipate that this dividend will grow in the future at a rate of 6% per year. Use the Gordon model to calculate the company's cost of equity rE.NoRagrets, Inc is expected to pay a dividend in year 1 of $2 and a dividend in year 2 of $2.40. After year 2, dividends are expected to grow at the rate of 6% per year. An appropriate required return for the stock is 9%. The stock should be worth _______ today. Select one: a. $79.63 b. $73.21 c. $67.32 d. $73.37
- It is expected that ABC Ltd earnings will remain unchanged in the future. The company’s share price is currently worth $20.0. If the required rate of return is 15%, what is the dividend paid (with formula and calculation)The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 4% per year. Callahan's common stock currently sells for $26.75 per share; its last dividend was $2.50; and it will pay a $2.60 dividend at the end of the current year. a. Using the DCF approach, what is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. % b. If the firm's beta is 2.0, the risk-free rate is 8%, and the average return on the market is 14%, what will be the firm's cost of common equity using the CAPM approach? Round your answer to two decimal places. % c. If the firm's bonds earn a return of 12%, based on the bond-yield-plus-risk-premium approach, what will be rs? Use the midpoint of the risk premium range discussed in Section 10-5 in your calculations. Round your answer to two decimal places. % d. If you have equal confidence in the inputs used for the three approaches, what is your estimate of Callahan's cost…A firm pays a $13.80 dividend at the end of year one (D1), has a stock price of $149, and a constant growth rate (g) of 5 percent. Compute the required rate of return (Ke). (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)