BUSINESS HIGH SCHOOL

Summerdahl Resort’s common stock is currently trading at $36 a share. The stock is expected to pay a dividend of $3.00 a share at the end of the year D1 $3 00, and the dividend is expected to grow at a constant rate of 5% a year. What is its cost of common equity?

Answers

Answer 1
Answer:

Answer:

The cost of common equity is 13.33%

Explanation:

current price (Po) = $36

dividend (D1) = $3

growth rate (g) = 5%

let the cost of common equity be r

Po = D1/(r - g)

$36 = $3/(r -0.05)

r = 3/36 +0.05

  = 0.1333

Therefore, The cost of common equity is 13.33%

Related Questions

econ The presence of secondary markets ______________ the interest rates that firms have to pay on bonds issued by them.
why do you think governments want to influence the supply of alcohol and tobacco products by imposing excise taxes?
45. Which of the following statements about the relationship between magazines and the Internet is FALSE? A. The Internet was initially seen as a medium that would kill print magazines B. Some print magazines that have folded are finding new life on the Internet C The Internet is still widely considered to be putting the final nails into the coffin of print magazines D. Online-only magazines have gained journalistic credibility E. The Internet gives magazines the ability to do things that they couldn’t do in print
Meadow Range Pvt. Ltd. is a firm based in France that has one of the finest wine breweries in the country. Due to the availability of many grape varieties and suitable climatic conditions for growing grapes in France, Meadow Range has an advantage when competing in the international market. According to the diamond model, Meadow Range benefits from:
On September 1, 2021, Gold Gaming sold 400 one-year subscriptions to its online gaming website for $90 each. The total amount received was credited to Deferred Revenue. What would be the required adjusting entry at December 31, 2021?

A service provided by -e-government that requires access to the Internet is _____.A. RFID tags

B. E-tax returns

C. Radio programming

D. CCTV (Closed circuit TV)

Answers

Answer:

B. E-tax returns

Explanation:

E-tax returns is the electronic filing of tax returns via the internet.  It entails online submission of pre-approved tax return forms available on the tax authority's website.

In recent years, governments have put measures to facilitate e-returns. It has simplified the process making it popular among taxpayers. Electronic tax filing has have contributed to having a high number of citizens registering as taxpayers.

One of the reasons organizations delay patches to plug holes in their security applications is___________.a. the rising cost of labor.
b. lack of information on effectiveness of patches.
c. the fear that the new technology contains a change that will cause problems down the road.
d. redundancy of patches within a short span of time.
e. bureaucratic inefficiency.

Answers

Answer:

The correct answer is C

Explanation:

The main and the primary reason for the organization or firm for delaying the patches to plug the holes in the application of the security is the fear.

The fear that the technology which is new contains the changes or the variations which could lead to the problems down the road. So, they delay the patches.

What does deficit spending require a government to do?

Answers

Answer:

B) TAKE ON DEPT

ANSWER ON ENG

The account used to record increases in owner's equity from the sale of goods or services is the __________ account. 1. revenue
2. Cash
3. capital
4. drawing

Answers

Your question is confusing
but i guess its cash (or capital )

2. Describe a customer database ​

Answers

Answer:

A customer database is the collection of information that is gathered from each person. The database may include contact information, like the person's name, address, phone number, and e-mail address. The database may also include past purchases and future needs.

Explanation:

The term development is best described as a measurement of a country's __________. A. infrastructure system B. basic resources C. economic diversity D. economic health and social conditions

Answers

Answer:

The correct option is C

Explanation:

The development is the term which is described as the change in the country economic from a low income national economy to the one which is modern. This states both the improvement in terms of quantity and quality, it means not in terms of only general wealth of the population increases but at the same their standard of living also increases or become better.
Other Questions
Drs. James and Janet Baker saw that many people experienced difficulty and frustration when typing, some because of physical disabilities. So they invented a voice recognition software to allow users to talk to the computer. Their ideas have become Dragon Naturally Speaking, a popular talk-to-type software application. Which of these statements describes their startup? A) Borrow heavility from existing products or services. B) Combine two businesses to create a market opening. C) Begin with a problem in mind or a pain you can relieve. D) Recognize a hot trend and ride the wave.
Which of the following best predicts the effect that the change in rainfall patterns will have on northern Australia's ecosystems?
Who promoted the theory that success and failure in business should be governed by natural law without interference?a. Andrew Carnegie b. John d. Rockefeller c. Herbert Spencer d. William G. Sumner
A team suffering from resentment among team members should work on its ______.a. Long term goalsb. Job satisfactionc. Communicationd. Customer service