Castillo Corporation common stock is currently priced at $39.75 per share. The company just paid $4.35 per share as its annual dividend. The dividends have been increasing by 7.5 percent annually and are expected to continue doing the same. What is the cost of equity

Answers

Answer 1

The cost of equity is 19.5%, this is the return that the shareholders will receive on their investment in the company.

What is the meaning of cost of equity?

The cost of equity are the return a company in theory pays to its equity investors, i.e., shareholders, in order to compensate for the risks they incur in investing in their investments.

Dividend paid, D0 = $4.35 per share

Current selling price = $39.75 per share

Dividend growth rate = 7.5% = 0.075

Now,

[tex]\rm\,Cost \,of\, equity\, = [ \frac{ [ ( D0 \times (1 + g) )}{39.75} ] + 0.075\\\\= [(\dfrac{4.35 \times (1 + 0.075)}{39.75})] + 0.075 \\\\= [\dfrac{4.67}{39.75}] + 0.075\\\\= 0.12+ 0.075\\\\= 0.195\times 100\\\\= 19.5\%[/tex]

Hence, The correct answer is 19.5%

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Related Questions

What are 3 consequences of having low credit when trying to buy a car or home?

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When someone has a low credit score at the time of buying a car or a home, the credit facility for such purchase will be offered by any bank to such person with higher interest rates, affect his credit score further and will also lead to rejection of application for such loan.

What are the effects of a low credit score?

When a credit score is low, the creditability of such person is also lowered in the market and the financial institutions do not offer attractive terms of credit to such person.

When a person who tries to buy a house or a car with a lower credit score, the effects and consequences of the same will be;

Banks will charge higher interest rates on the loan or advance offered. The period of loan or advance will be lesser. In worse case scenario, banks will reject his loan application.

Hence, it can be stated that having a low credit score when purchasing a car or a home will lead to the consequences as aforementioned.

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The _____ reflects the total market value of over 98 to 99% of all publicly traded stock in the United States.

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The total market value of around 98 to 99% of publicly traded stock in the U.S. is shown on the Dow Jones Wilshire 5000 Index.

What is the Dow Jones Wilshire 5000 Index?

It is a market weighted index that shows almost all the total market value of  all the public stock traded in the United States.

Even though it claims to show the entire value of public stock in the U.S., it only shows about 98 to 99% of the stock.

In conclusion, the answer is Dow Jones Wilshire 5000 Index.

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List the 3 main credit bureaus and explain what information they collect.

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The three main credit bureaus are Equifax, Experian, and TransUnion, which collect and research individual credit information sold to creditors.

What is a credit bureau?

A credit bureau provides the information that creditors and lenders use to make important lending decisions.

Principally, credit bureaus:

Collect credit information of individuals.Make the information available to third parties (lenders and creditors).Provide credit ratings and reports to individuals when requested.

Thus, a  credit bureau provides the information that creditors and lenders use to make important lending decisions.

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The stock of Yakir Development has a beta of 1.31. The risk-free rate of return is 1.5 percent and the market rate of return is 8 percent. What is the risk premium on this stock

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The risk premium of a stock of Yakir Development given its beta, risk free rate of return and market rate of return is 6.5%.

What is the risk premium?

A stock is used to raise capital by public companies. Stocks gives its holders an ownership right in the company.

The risk premium is the rate of interest in excess of the risk free rate that investors demand for holding a risky stock.

Risk premium = market rate of return - risk free rate

8 - 1.5 = 6.5%

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When the first place team visits another team's stadium for a game, prices for seats to that game rise. This is called
evenue pricing
argin pricing
eld management pricing
namic pricing

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When the first-place team visits another team's stadium for a game, prices for seats to that game rise. This is called yield management pricing.

What do you mean by a price?

Price refers to the money that needs to be paid for acquiring any product or service.

When different seats are priced differently, it is known as yield management pricing. In simple words, it is a variable pricing strategy that is based on understanding, anticipating, and influencing consumer behavior for profit maximization.

So, when the first place team visits another team's stadium, prices for seats to that game rise is known as yield management pricing.

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What is the value of contracting with celebrities to endorse the company's brand of athletic footwear?

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The value added is that celebrity endorsement provides in increasing a company's sales and market share of branded footwear.

What does brand means?

A brand is the collective impact or lasting impression experienced by customers who come into contact with a company and its products and services.

It is a way of specially identifying your business because it create uniqueness to a company's image.

Hence, the value added is that celebrity endorsement provides in increasing a company's sales and market share of branded footwear.

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The scandal at luckin coffee is being portrayed by the company as perpetrated by ________, whereas some analysts suspect it is more likely by a ________.

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The scandal at luckin coffee is being portrayed by the company as perpetrated by stakeholders whereas some analysts suspect it is more likely by competitors.

What is scandal?

Scandals are series of events or happenings action about an individual or group of people which shocks people and bring about disapproval of such individual by the public or people.

Scandal can damage an individuals career and business. It can be perpertuated by colleagues, Competitors or Friend.

Therefore, the scandal at luckin coffee is being portrayed by the company as perpetrated by stakeholders whereas some analysts suspect it is more likely by competitors.

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Write 5 words would that you feel best to describe your personality?

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Honest, kind, outgoing, selfless, driven.
Nice, outgoing, caring, kind, funny

Talia, Shemp and Lola formed a corporation under the name Dependable Health Solutions, Inc., and advertise their services nationwide. All stock is owned by Talia, Shemp and Lola as principals, and none was offered to anyone outside the corporation. This would be classified as a

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Since All stock is owned by Talia, Shemp and Lola as principals, it would be classified as a municipal corporation.

What is municipal corporation?

municipal can be regarded as a corporation which is a large private corporation with many shares.

Therefore, the described corporation is a

municipal corporation because no share are sold to the public or traded on a stock exchange.

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When power or influence within an organization flow to individuals or leaders who have the ability to help an organization or group handle challenges, the leadership influence is one based on:

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The leaders who have the ability to help an organization or group handle challenges, the leadership influence is one based on social or interpersonal influence.

What is social or interpersonal influence?

The process by which the presence or action of others influences an individual's attitudes, beliefs, or behavior is known as social influence.

Conformity, compliance and obedience, and minority influence are the four areas of social influence.

A person's adopted behavioral patterns can be affected by changes in their personal beliefs and thought processes.

Thus, the influence is social or interpersonal.

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Your buyer clients have plenty for a down payment and closing costs, and they'd like a lower interest rate than the going rate. How can they use some of their saved funds to get a better interest rate?

Answers

The can use some of their saved funds to get a better interest rate by: Buying down the interest rate.


What is buydown?

Buydown can be defined as the way in the a borrower pay a discount or a fees so as to receive an interest rate that is lesser or lower when they want to repay the amount borrowed.

Buydown is important as it gives borrower the opportunity to payback the amount lend to them at a lower interest rate.

Therefore the can use some of their saved funds to get a better interest rate by: Buying down the interest rate.

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If LVT chooses to hedge its transaction exposure in the forward market, what rate will it pay for the euros and how many USD will be required to purchase the euros at the forward rate

Answers

When LVT chooses to hedge its transaction exposure in the forward market, a six month forward rate will be paid.

What is a transaction?

It should be noted that a transaction simply means a business deal that occurs between two parties.

In this case, when LVT chooses to hedge its transaction exposure in the forward market, a six month forward rate will be paid.

The amount required to make the purchase will be:

= 15000000 × 1.18

= $17700000

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When filing an insurance claim, the policyholder must pay a ________________, which is the amount you owe before insurance will cover the rest of the bill.

Answers

Answer:

The answer is deductible.

Explanation:

When filing an insurance claim, the policyholder must pay a deductible, which is the amount you owe before insurance will cover the rest of the bill.

When filing an insurance claim, the policyholder must pay a deductible which is the amount you owe before insurance will cover the rest of the bill.

What is an insurance claim?

The official application to a financial institution for coverage or compensation for a covered loss or additional event made by a policyholder is called an insurance claim which helps an individual to recover from damages and losses.

Many insurance plans have deductibles which can be seen in, including health insurance, auto insurance, and homeowners insurance.  to help manage expenses by requiring policyholders to bear a portion of the financial burden A deductible is intended in the claim of any insurance.

Before insurance coverage begins, a policyholder must pay the deductible amount. When the deductible is met, the insurance coverage will pay the balance of the bill.

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As discussed in the text, a main purpose of the _______ is to prevent unreliable oral evidence from interfering with a contractual relationship.

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As discussed in the text, a main purpose of the ease contractual negotiations is to prevent unreliable oral evidence from interfering with a contractual relationship.

What is contractual negotiations?

Contract negotiation is the process of achieving an agreement on a set of legally binding term. When two companies negotiate, they both seek to secure the best deal and minimize their financial, legal, and operational risks.

Negotiation is essential for advancing in the job, resolving disagreements, and adding value to contracts.

Thus, contractual negotiations is the prevention.

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Anyone in the Marines or thinking of joining or any other military? Tell me about it, I hear the marines are the hardest one so If I did try that I don't know how I would survive. They are all hard but I don't know there is a lot of benifits like full college tuitions payed off, medical etc.

Answers

Answer:

well if you do good u will not be dead u know

Explanation:

A buyer has a 30 year, $750,000 loan with a 5. 75% interest rate. How much is the first monthly payment?

Answers

Answer: $3,593.75
Explanation: Multiply the principal balance by the interest rate: $750,000 x . 0575 = $43,125;. Then find the monthly rate by dividing $43,125 by 12 to get $3,593.75.

Relative to a perfectly competitive market, a monopoly results in.

Answers

Answer:

Formation of Monopoly shows that theres is only one supplier in the market with many buyers, this results in outcome of many catels

Relative to a perfectly competitive market, a monopoly results in a gain in producer surplus equal to the gain in consumer surplus.

What happens when a perfectly competitive market becomes a monopoly?

If a perfectly competitive industry becomes a monopoly, then we know that the industry supply curve becomes the monopoly.

Does a monopoly reduce economic efficiency?

Yes, it does, because it causes a deadweight loss. If a perfectly competitive industry turns into a monopoly, then consumer surplus will.

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What percentage of jobs are found through networking? a. 0%-20% b. 20%-40% c. 40%-60% d. 60%-80%

Answers

Answer:

Your answer would be D. 60%-80%

Explanation:

Answer:

D. 60% - 80%

Explanation:

60% - 80% of jobs are found through networking.

I hope it helps! Have a great day!

pan~

Johnson and Johnson targeted the adult market with its baby powder and shampoo. In _____, Johnson and Johnson increased the consumption of the current product.

Answers

In modifying the market, Johnson and Johnson increased the consumption of the current product.

What is market modification?

Market mofification can be defined as the way in the a manufaturer  target the market so as to attract potentials customers.

Most producer tend to make use of  market modication as a marketing strategy so as to have more advantage over other competitors by reaching their competitors  customers and to as well increase sales.

Therefore in modifying the market, Johnson and Johnson increased the consumption of the current product.

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If the money multiplier is 3 and the fed wants to increase the money supply by $900,000, it could:.

Answers

Answer:

buy $300,000 worth of bonds

Explanation:

Hope this helps:)...if not then sorry for wasting your time and may God bless you:)

Hector, a manager at Roseland Corp., recently illustrated __________ by promoting two employees because their performance had greatly improved. Group of answer choices empowerment withholding punishment extinction positive reinforcement aversive consequence

Answers

Hector illustrated Positive reinforcement by promoting two employees because of their great performance.

What is positive reinforcement?

Positive reinforcement is an act of rewarding good behavior to encourage it to happen again in the future, as Getting an A in the test was the good reinforcement I needed to keep learning.

For example, Giving positive reinforcement by giving the child extra rights or tangible rewards.

Thus, Positive reinforcement is the correct statement.

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Folger Group pays its executives short-term incentives for meeting financial targets. What could be included in this incentive pay

Answers

Something that could be included in the incentive pay to the executives of the Folger Group is bonus for meeting the required goal for return on investment.

What incentives do executives get?

Executives are top management so their incentive pay will be based on the performance of the company as a whole.

One such incentive will therefore be a bonus for when the company meets the goal for the return on investment that was set by shareholders throught the Board.

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A monopolist maximizes profits by a. producing an output level where marginal revenue equals marginal cost. b. charging a price that is greater than marginal revenue. c. earning a profit of (P - MC) x Q. d. Both a and b are correct.

Answers

A monopolist maximizes profits by a. producing an output level where marginal revenue equals marginal cost.

Who is a monopolist?

The monopolist is characterized by the following:

Market dominance and controlLack of competitionLack of substitute goods or servicesSets prices.

Thus, a monopolist maximizes profits by a. producing an output level where marginal revenue equals marginal cost.

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From an environmental standpoint, refusing, reducing and reusing are preferred over recycling because they are ____ approaches that tackle the problem of waste production at the front end.

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Refusing, reducing, and reusing are preferred over recycling because they are A. waste prevention approaches pre-tackling the problem of waste production.

What is waste prevention?

Waste Prevention (Source Reduction or Waste Minimization) includes practices that limit or reduce the amount and the toxicity of generated wastes.

Waste Prevention efforts are aimed at tackling waste production at the front end instead of managing already-generated waste.

Answer Options:

A. waste prevention

B. green

C. more feasible

D. management

E. integrated

Thus, from an environmental standpoint, refusing, reducing, and reusing are preferred over recycling because they are A. waste prevention approaches pre-tackling the problem of waste production at the front end.

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Compensation of executives has soared over the last forty plus years to more than 271 times the pay for average workers. Remedies to rein in executive compensation include all but:

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Answer:

. Restrictions by the law as to the maximum total compensation allowable

A domestic company creates a strategic partnership with a foreign company in order to enter a foreign market. Both companies share in ownership, control, and financial investments. This market entry strategy is known as ________.

Answers

When two companies come together strategically to operate is called a joint venture.

What is a Joint Venture?

A Joint simply put is when two separate entities or business agree to share resources with the aim of archeiving similar or one objective.

Mostly, this is carried out when a  company intend to enter a foreign market.

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Your budget can help you keep track of
take in versus how much you spend.
OA. rate of return
OB. discretionary income
C. cash flow
OD. net worth
which is how much money you
SUBMIT

Answers

Your budget can assist you in keeping track of money. That is cash Flow. A company's cash flow is a measure of how much money it brought in or spent over a period of time.

What is the primary objective of cash flow?

The goal of a cash flow statement is to show what occurred to a company's cash during a specific time period, known as the accounting period.

It displays an organization's ability to operate in the short and long term, based on the amount of money moving in and out.

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Answer:C

Cash flow

Explanation:

Drake is applying for a business loan on behalf of its company. before applying for the said loan, he draws up a road map of the company. he highlights the prospects of the business and the ability of its management to follow the path to take the business forward. what is this document prepared by drake known as? the document prepared by drake is known as a plan.

Answers

The name of the document prepared by Drake that draw the road map of the company is known as a Business plan.

What is a Business plan?

This is aformal and written document which outlines the goals of the company, shows tasks to be performed and shows the financial plans to be use to accomplish the outlined goals.

Therefore, the business plan is the document that draws up a road map of the company and allows to highlights the prospects of the business

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S: In the space below, write a brief scenario (story) of a selling situation that illus-
trates at least three terms from the Word Bank above. You may select the prod-
uct of your choice. Circle the words from the Word Bank when they appear in
the story. Products you might want to consider using are a computer, a copier,
running shoes, a camera, luggage, or a CD player.

Answers

The answer is C I did it last year in class

Question Number 5) UPS management feels that one of the main advantages ________ provides to the company is structure a union salting b the bargaining unit c the union d the right to work e arbitration

Answers

One of the main advantages of C. The Union in a workplace is that it helps to provide a structure.

What is a Labor Union?

This refers to a group that protects the rights and interests of workers to have better working conditions and remunerations.

Hence, we can see that the importance of labor unions cannot be overemphasized as according to UPS management, they believe that one of the main advantages of C. The Union in a workplace is that it helps to provide a structure

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