QUESTIONS ON CHAPTER 15 (COST OF CAPITAL) 1.) The Wind Rider Company has just issued a dividend of $2.10 per share on its common stock. The company is expected to maintain a constant 7% growth rate on its dividends indefinitely. If the stock sells for $40 a share‚ what is the company’s cost of equity? 2.) The Ball Corporation’s common stock has a beta of 1.15. If the risk free rate is 5% and the expected return on the market is 12%‚ what is Ball Corp.’s cost of equity capital?
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Cost of Capital Firms need to make capital investment i.e.‚ purchasing fixed assets such as factories‚ machineries‚ equipment‚ etc. After deciding what capital investments to make‚ they need to decide on the financing – sources of capital. The sources: Long-Term Debt‚ Common Stock‚ Preferred Stock and Retained Earnings. Then they need to find the cost of obtaining each source of financing today (not historical). Cost of Capital - The rate of return that a firm must earn on its investment
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Microeconomics Topic 6: “Be able to explain and calculate average and marginal cost to make production decisions.” Reference: Gregory Mankiw’s Principles of Microeconomics‚ 2nd edition‚ Chapter 13. Long-Run versus Short-Run In order to understand average cost and marginal cost‚ it is first necessary to understand the distinction between the “long run” and the “short run.” Short run: a period of time during which one or more of a firm’s inputs cannot be changed. Long run: a period of time during which
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Exams Review Test Submission: Exam 2 SKIP TO COURSE MENUSKIP TO TOP FRAME TABS Content User Justin Osborne Course ACC 440 Legal Aspects of Accounting‚ Spring 14‚ 23707 Test Exam 2 Started 2/25/14 9:31 PM Submitted 2/25/14 10:30 PM Status Completed Attempt Score 64 out of 100 points Time Elapsed 58 minutes out of 1 hour. Instructions No Printing! <script lang=”Javascript” src=”h ttp://www.eku.edu/onlinelearning/np.js”></script> Question 1 4 out of 4 points Maria holds an instrument that states
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utility says that marginal utility: A. is negative. B. is positive. C. is always falling. D. falls after some point. 6. Given the price‚ the lower the marginal utility of a good: A. the less you are willing to buy of it. B. the more you are willing to buy of it. C. the lower the total utility of that good. D. the more substitutes there are. 7. Demand is said to be elastic when the: A. percentage change in quantity demanded is less than the percentage change in price. B. percentage
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Wednesday January 11th‚ 2012 Chapter 1 Introduction to Management Accounting What is Managerial Accounting? -managerial accounting is providing information for a company’s internal users -it is the firm’s internal accounting system -it is designed to support the information that managers need -it is not bound by any formal criteria such as GAAP or IFRS (International Financial Reporting Standards) -managerial accounting has 3 basic objectives: 1. Provide information for planning the organizations
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ACCT 2542 CORPORATE FINANCIAL REPORTING AND ANALYSIS Course Outline Semester 2‚ 2012 Part A: Course-Specific Information Australian School of Business School of Accounting i ACCT 2542 Corporate Financial Reporting & Analysis TABLE OF CONTENTS PART A. COURSE SPECIFIC INFORMATION 1 1. STAFF CONTACT DETAILS 1 2. COURSE DETAILS 1 2.1. Teaching Times and Locations 1 2.2. Units of Credit 2 2.3. Summary of Course 2 2.4. Course Aims and Relationship to Other Courses 2 2.5. Student Learning
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COST ACCOUNTING Select the one best answer for each: 1. Which one of the following would not be classified as manufacturing overhead? a. Indirect labor b. Direct materials c. Insurance on factory building d. Indirect materials 2. Prime costs of a company are $3‚000‚000‚ manufacturing overhead is $1‚500‚000 and direct labor is $750‚000. What is the amount of direct materials? a. $1‚500‚000. b. $750‚000. c. $2‚250‚000.
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Ratio Analysis Memo ACC 291 Ratio Analysis Memo For this assignment we need to choose a virtual organization and prepare a memo to the CEO to discuss the findings from our ratio calculations and also submit a horizontal and vertical analysis for the balance sheet and the income statement. The virtual organization our team chose was Berry’s Bug Blasters. Listed first in this paper will be the ratio calculations; liquidity‚ profitability‚ and solvency. Solvency Ratios | Debt to Total
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Medical Costs and the Impact on Us Professor Robert Hudson from the London School of Economics define the indifference curve as a graph showing different bundles of goods between which a consumer is indifferent. That is‚ at each point on the curve‚ the consumer has no preference for one bundle over another. One can equivalently refer to each point on the indifference curve as rendering the same level of utility (satisfaction) for the consumer. Utility is then a device to represent preferences
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