Mavs Inc. wishes to determine its cost of common stock equity, rs. The market price, P0, of its common stock is $40.07 per share. The firm expects to pay a dividend, D1, of $4.20 at the end of the coming year, 2021. The dividends paid on the outstanding stock over the past 6 years (2015â2020) were as follows:

2015 $3.60
2016 3.65
2017 3.70
2018 3.85
2019 4.00
2020 4.10

What is the cost of common stock equity financing?

Answer:

13.12%

Explanation:

Using the Gordon growth rate model, the cost of common stock equity can be determined using the formula below:

cost of common equity=expected dividend/current market price+growth rate

expected dividend=dividend in a year's time=D1= $4.20

current market price=P0=$40.07

The growth rate of the dividend can be ascertained by using the future value below:

FV=PV*(1+g)^n

FV=2020 dividend=$4.10

PV=2015 dividend=$3.60

g=growth rate=unknown

n=numbr of years between 2015 and 2020=5(dividend has grown for only 5 years not 6 years)

$4.10=$3.60*(1+g)^5

$4.10/$3.60=(1+g)^5

$4.10/$3.60 can be rewritten thus($4.10/$3.60)^1

($4.10/$3.60)^1=(1+g)^5

divide indexes on both sides by 5

($4.10/$3.60)^(1/5)=1+g

g=($4.10/$3.60)^(1/5)-1

g=2.64%

cost of common equity=($4.20/$40.07)+2.64%

cost of common equity=13.12%

Repetitive sequences of activities that express and reinforce the key values of the
organization, identify important goals and people are referred to as
A) rituals.
B) stories.
C) material symbols.
D) cultural typologies.

Long-term disability insurance _____. a. pays for temporary living expenses and moving expenses incurred by disabled employees b. pays a flat fee for a fixed number of hours of legal assistance each month for disabled employees c. provides continuing income protection for employees who become disabled and are unable to work

The primary responsibility for establishing and maintaining internal control rests with
А
The controller
В.
The internal auditor
С
The treasurer
D
Management

Match each example to the appropriate term.

a. Trees used to make paper
1. Human capital
2. Technological knowledge
3. Physical capital

b. A printing press used to make books.
1. Human capital
2. Technological knowledge
3. Physical capital

c. A method of organizing workers to increase production per hour.
1. Human capital
2. Technological knowledge
3. Physical capital

d. The skills workers learn during a training session.
1. Human capital
2. Technological knowledge
3. Physical capital

One large bakery still receives flour in 25-pound bags from their own company's warehouse. They use an average of 5500 bags a year. The production step that uses these bags use 35 bags per day while the usage is 16 bags per day. It costs $12.00 to configure the machines for each run. Annual carrying costs are $7.50 per bag. What will be their average number of bags on hand if they request the EPQ bags in each order

Sheridan Company just began business and made the following four inventory purchases in June: June 1 144 units $ 952 June 10 184 units 1472 June 15 184 units 1564 June 28 144 units 1296 $ 5284 A physical count of merchandise inventory on June 30 reveals that there are 194 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is

In 2012, Wingen Inc. sold 325,000 units at $8 each .Sales volume is expected to increase by 15 percent in 2013 while the price of each unit is expected to decrease by 15 percent. the expected sales revenue for 2013 is a. $373,750 b.$2,541,500 c.$1,878,500 d.$2,990,000

An oligopolistic market structure is distinguished by several characteristics, one of which is either similar or identical products. Which of the following are other characteristics of this market structure?

a. Market control by many small firms
b. Difficult entry
c. Mutual interdependence
d. Market control by a few large firms
e. Mutual dependence

You are the manager of Black Spot Computers, which competes directly with Condensed Computers to sell high-powered computers to businesses. From the two businesses’ perspectives, the two products are indistinguishable. The large investment required to build production facilities prohibits other firms from entering this market, and existing firms operate under the assumption that the rival will hold output constant. The inverse market demand for computers is P = 5,900 − Q, and both firms produce at a marginal cost of $800 per computer. Currently, BlackSpot earns revenues of $4.25 million and profits (net of investment, R&D, and other fixed costs) of $890,000. The engineering department at Black Spot has been steadily working on developing an assembly method that would dramatically reduce the marginal cost of producing these high-powered computers and has found a process that allows it to manufacture each computer at a marginal cost of $500. How will this technological advance impact your production and pricing plans? How will it impact Black Spot’s bottom

The following information is available for a company's cost of sales over the last five months. Month Units sold Cost of sales January 470 $ 33,800 February 870 $ 40,500 March 1,950 $ 52,500 April 2,470 $ 64,500 Using the high-low method, the estimated total fixed cost is: Multiple Choice $26,586. $106,344. $53,172. $17,533. $30,700.

Dobles Corporation has provided the following data from its activity-based costing system:

Activity Cost Pool Total Cost Total Activity
Assembly $228,060 18,000 mahcine hours
Processing orders $34,068 1200 orders
Inspection $125560 1720 inspection hours

The company makes 420 units of product D28K a year, requiring a total of 460 machine-hours, 80 orders, and 10 inspection-hours per year. The product's direct materials cost is $48.96 per unit and its direct labor cost is $25.36 per unit.
According to the activity-based costing system, the unit product cost of product D28K is closest to:

a. $95.34 per unit
b. $93.60 per unit
c. $74.32 per unit
d. $89.93 per unit

Nichols Company uses the percentage of receivables method for recording bad debts expense. The month-end accounts receivable balance is $250,000 and credit sales during the month were $1,000,000. Management estimates that 4% of accounts receivable will be uncollectible. The Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment. The adjusting entry that Nichols must make includes: a. a credit to the allowance for $7,500. b. a credit to the allowance for $30,000. c. a debit to bad debt expense for $10,000. d. a debit to bad debt expense for $40,000.

If a firm has a market beta of 0.9. is subject to an income tax rate of 35 percent, has a risk-free rate of 6 percent, a market risk premium of 7 percent, and has a market value of debt to market value of equity ratio of 60 percent, what does the market expect the firm to generate in terms of equity returns using CAPM?
a) 12.3%
b) 7%
c) 6%
d) 13%

The parts can be purchased from an outside supplier for only $28 each. The space in which the parts are now produced would be idle and fixed production costs would be reduced by one-fourth. If the parts are purchased from the outside supplier, the annual impact on the company's operating income will be:________
a) $24,000 increase
b) $24,000 decrease
c) $56,000 increase
d) $56,000 decrease

At the end of 2010 Jarrett Corp. developed the following forecasts of net income:

Year Forecasted Net Income
2011 $20,856
2012 $22,733
2013 $24,552
2014 $27,252
2015 $29,978

Management believes that after 2015 Jarrett will grow at a rate of 7% each year. Total common shareholders' equity was $112,768 on December 31, 2010. Jarrett has not established a dividend and does not plan to paying dividends during 2011 to 2015. Its cost of equity capital is 12%.

Required:
Compute the value of Jarrett Corp. on January 1, 2011, using the residual income valuation model.

1. Managerial Internal (Inside) accounting information reports are generally prepared for A) Stockholders or Shareholders B) Creditors, Lenders, or Banks C) Managers. D) Regulatory Agencies, like the IRS or SEC

Reynolds Manufacturers Inc. has estimated total factory overhead costs of $136,400 and expected direct labor hours of 12,400 for the current fiscal year. If Job 117 incurs 1,110 direct labor hours, Work in Process will be debited and Factory Overhead will be credited for a.$12,210 b.$136,400 c.$68,200 d.$1,110

CONCILIACIONES BANCARIAS

The following information relates to last year's operations at the Legumes Division of Gervani Corporation: Minimum required rate of return 12% Return on investment (ROI) 15% Sales $ 900,000 Turnover (on operating assets) 3 times What was the Legume Division's net operating income last year

provides the following data: 20X920X8 Cash$41,000 $25,000 Accounts Receivable, Net102,000 62,000 Merchandise Inventory72,000 50,000 Property, Plant, and Equipment, Net181,000 120,000 Total Assets$396,000 $257,000 Additional information for the year ending December 31, 20X9: Net Credit Sales$550,000 Cost of Goods Sold150,000 Interest Expense25,000 Net Income181,000 Calculate the rate of return on total assets for 20X9.

The first step in creating your personal marketing plan is to conduct a career audit.
Apply the "Evaluate your abilities" step in career audit on yourself including your work (if working), a
specific project you did, your academic progress or any major event(s) on your career path.

price strategy of aquafina

A business school has 15 full-time faculty and seven of them have tenure. A random sample of six faculty are randomly selected to form a committee. What is the probability that exactly three of the faculty on the committee have tenure?

The three goals of executive compensation are to align management’s interest with the shareholders, to keep management from leaving in bad times, and to refrain from giving too much of shareholder profits to management.

a. True
b. False

Why My LinkedIn Lead Generation Is Failing?

Chad is the founder of a firm producing self-driving vehicles. Because the industry is so new and chaotic, Chad favors a top-down strategic planning approach in which he exerts strong control over all aspects of the business, from product development and design to manufacturing and marketing. What is wrong with this scenario

Acoma Co. has identified one of its cost pools to be quality control and has assigned $140,400 to that pool. Number of inspections has been chosen as the cost driver for this pool; Acoma performs 30,000 inspections annually. Suppose Acoma manufactures two products that consume 12,600 (Product 1) and 17,400 (Product 2) inspections each.
Assume that Acoma manufacturers only the two products mentioned and they consume 100 percent of the company’s quality inspections. Using activity proportions, determine how much quality control cost will be assigned to each of Acoma’s product lines.

Smith Construction,Inc.just paid a $2.78 dividend.The dividend is expected to grow by 4% each year for the next three years.After that the company will never pay another dividend ever again.If your required return on the stock investment is 10%,what should the stock sell for today?
A) $7.46
B) $28.91
C) $46.33
D) $15.63

explain how the looting of shops and malls will affect businesses in terms of the relationship between social responsibility and triple bottom line​

Brian lives in San Francisco and runs a business that sells guitars. In an average year, he receives $704,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $404,000; he also pays wages and utility bills totaling $286,000. He owns his showroom; if he chooses to rent it out, he will receive $3,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Brian does not operate this guitar business, he can work as an accountant, receive an annual salary of $20,000 with no additional monetary costs, and rent out his showroom at the $3,000 per year rate. No other costs are incurred in running this guitar business.
Identify each of Jake's costs in the following table as either an implicit cost or an explicit cost of selling guitars.
Implicit Cost Explicit Cost
The wholesale cost for the guitars that Charles pays
the manufacturer.
The wages and utility bills that Charles pays.
The salary Charles could earn if he worked as an accountant.
The rental income Charles could receive if he chose to rent
out his showroom .
Complete the following table by determining Jake's accounting and economic profit of his guitar business.
Profit (Dollars)
Accounting Profit
Economic Profit
If Jake's goal is to maximize his economic profit, he___stay in the guitar business because the economic profit he would earn as an accountant would be___.