WHAT IS THE COST OF XYZ STOCK THAT EXPCTS TO PAY A DIVIDEND OF $1.89, WHEN THE P
ID: 2724472 • Letter: W
Question
WHAT IS THE COST OF XYZ STOCK THAT EXPCTS TO PAY A DIVIDEND OF $1.89, WHEN THE PRICE OF THE STOCK WILL BE ISSUED AT $24.50 WITH 7$ IN FLOTATION COSTS, THE COMPANY EXPECTS TO GROW AT 4% PER YEAR?
Question 67 options:
7.71%
8.30%
11.71%
12.30%
Carol's boutique buys $2,000,000 (invoice price) of clothes and accessories from one of its vendors on terms of 3/15 net 45, how much TOTAL trade credit from this vendor is available?
Question 68 options:
$161,667
$1,940,000
$242,500
$5389
Carol's boutique buys $2,000,000 (invoice price) of clothes and accessories from one of its vendors on terms of 3/15 net 45, how much FREE trade credit from this vendor is available?
Question 69 options:
$68,979
$45,987
$53,889
$80,833
HOW LONG WILL THE FOLLOWING PROJECT TAKE TO PAYBACK GIVEN THAT THE COST OF CAPITAL IS 7.5%
Question 70 options:
3.17
4.0
3.68
4.20
A)7.71%
B)8.30%
C)11.71%
D)12.30%
Explanation / Answer
1 Cost of new Equity =D1/(P0-F) +g Given P0-F =24.50 D1=1.89 F= 7 g=4% So cost of new equity=1.89/(24.5) +0.04 =11.71% So Correct option is C . 2 Purchase price 2,000,000 Term 3/15,n45 Dicount 60,000 Net Purchase price = 1,940,000 So Ther net cost pf purchase = 1,940,000 Daily net purchase =1940000/360= 5,389 Payable level if takes discount =5315*15= 80,833 Payable level if donot take discount =5315*45= 242,500 So Total Trade credit =242500 Option C is correcty 3 Free tarde credit is $80833 So Option D is correct 4 Year Initial Outlay Cash inflows Year 0 (80,000) Year 1 25,000 Year 2 25,000 Year 3 25,000 Year 4 30,000 Year 5 20,000 Payback years is 3.17 Option A is correct.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.