S. Bouchard and Company hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D0 = $0.85; P0 = $22.00; and g = 6.00% (constant). The CEO thinks, however, that the stock price is temporarily depressed, and that it will soon rise to $40.00. Based on the DCF approach, by how much would the cost of equity from retained earnings change if the stock price changes as the CEO expects? Group of answer choices -1.49% -1.66% -1.84% -2.03% -2.23%

Answers

Answer 1

Based on the change in the stock price, the change in the cost of equity to S. Bouchard and Company would be -1.84%.

How would the Cost of Equity change?

The original cost of equity is:

22 = (0.85 x 1.06) / (cost of equity - 6%)

Cost of equity + 6% = 0.901 / 22

Cost of equity = 0.901 / 22  + 6%

= 10.1%

The new cost of equity:

Cost of equity = (0.85 x 1.06) / 40 + 6%

= 8.25%

The change is:

= 8.25 - 10.1

= -1.84%

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Related Questions

To cover anticipated cash shortages, management can ______. Multiple select question. hire more skilled employees to increase sales refinance to change the repayment plan of past borrowings purchase additional property, plant and equipment to increase assets plan financing activities to borrow money

Answers

To cover anticipated cash shortages, management can refinance to change the repayment plan of past borrowings. Option B. This is further explained below.

What is finance?

Generally, finance is simply defined as government or big business control over huge sums. of money.

In conclusion,  Management has the option of refinancing to adjust the repayment schedule of prior borrowings in order to address expected cash shortfalls.

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Land and mineral resources, transportation and communication facilities, factories and farm buildings, equipment, and tools and machinery are all examples of: Multiple choice question. unlimited economic resources. economic growth. scarce economic resources. insatiable wants.

Answers

Resources such as land and mineral resources, as well as factories and equipment, are all considered scarce economic resources.

What are scarce economic resources?

These refer to most resources that are available to us for producing goods and services.

They are referred to as scarce because there aren't enough of them to engage in all the production needed. Examples range from land to equipment and tools.

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If an increase in the price of good e leads to a large decrease in the demand for good f, what is the relationship between the two goods?.

Answers

The relationship between the two goods is: The goods are complementary.

What are complementary goods?

Complementary goods can be defined as those goods which consumer buy together and as well  use together.

The goods are tend to be complementary based on the fact that the cross-price elasticity of demand of those goods are tend to be negative and large.

Therefore the relationship between the two goods is: The goods are complementary.

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A farmer bought a scratch ticket and found out later that he won $1,200,000. After 35% was deducted for income taxes he invested the rest; some at 3.5% and some at 5.75%. If the annual interest earned from his investments is $33,600, find the amount he invested at each rate.

Answers

The amount invested at 3.5% interest rate is $5,000.

The amount invested at 5.75% interest rate is $775,000.

What are the linear equations that represent the question?

Total amount invested = ( 1 -tax rate) x amount won

0.65 x 1,200,000 = $780,000

a + b = $780,000 equation 1

0.035a + 0.0575b = $33,600 equation 2

Where:

a = amount invested at  3.5% interest rate b = amount invested at  5.75% interest rate What are the amounts invested at  3.5% and 5.57% interest rate ?

Multiply equation 1 by 0.0575

0.0575a + 0.0575b = 44,850 equation 3

Subtract equation 2 from equation 3

11,250 = 2.25a

a = 11,250 / 2.25

a = $5000

In order to determine the value of b , subtract $5000 from 780,000.

780,000 - 5000 = $775,000

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Check all of the following that are correct that can have a single owner ? MARK YOU THE BRAINLIEST!

Answers

The establishment/items that can ave a single owner includes:

Sole proprietorshipPrivate corporationNon-profit corporation

What is a single owner?

This refers to any form of establishment that can be owned and operated by a natural person.

Therefore, in the list, the Sole proprietorship, Private corporation and Non-profit corporation are establishment that can have a single owner.

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Drag each tile to the correct location on the table.
Classify the sentences based on whether they describe an investing mistake or a good investment decision.
1) Sanjay invests in companies in
a variety of industries.
2) Ryan invests only in the stock of
companies he has complete faith in.
3) Silvia successfully avoids investing
in unfamiliar foreign companies.
4) Sabina invests small amounts in
stocks, bonds, and real estate.
5) Ricardo starts investing in index
funds with the aim of building
his wealth steadily over time.
6) Martha decides to hold her
investments despite their poor
market performance over
three years.
-investing mistakes
- Good investment decision

Answers

The correct options for the matchup are:

For Investing mistake :

Silvia Ryan Martha

For Good investment decision:

Sanjay Ricardo Sabina

What is known as an investment?

An investment is known to be a kind of an asset or item that is gotten by a person with the aim of getting income or appreciation.

Note that Appreciation is said to be an increase in the value of an asset in course of time and from the above, you can see those who made good decision and those who made bad decision.

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Answer:

Investing mistake :

Silvia

Ryan

Martha

investment decision:

Sanjay

Ricardo

Sabina

Explanation:

if your monthly fixed cost is 22,000$ and the unit price of a vase is 240$ and your cost per shirt is 40% of the unit price.how many vases do you have to produce to make profit?

Answers

You will have to produce : 18 vases to make a profit

Given data

Monthly fixed cost = $22000

unit price of vase = $240

cost per shirt = 40% * $240 = $96

Determine the number of vases to be produced

To make a profit ; revenue has to greater than cost

Total cost = 22,000

unit costs : vase = $240 , shirt = $96

Total number of shirts and vase bought = 22000 / ( 240 + 96 )

= 22000 / 336 ≈ 65

Therefore number of vase you need to buy will be 2.5 times lower than the shirts because of the unit cost

x ( number of vase ) = 65 / 3.6 ≈ 18 vases

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What is one thing shared lane markings are not used for?.

Answers

The one thing that the shared lane markings are not used for is Decreasing the possibility of Highway Hypnosis.

What are the shared lane markings?

Shared lane markings are the road markings that indicate a shared lane environment.

The shared lanes may be for bicycles and automobiles.

The shared lane markings, also known as Sharrows, can also:

Guide bicyclists away from the hazardous "door zone" beside parked cars.Function as positioning cues.

Thus, the one thing that the shared lane markings are not used for is Decreasing the possibility of Highway Hypnosis.

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What is a non-economic benefit to
international trade?
A. increased productivity
B. exposure to new cultures
C. lower input costs

Answers

increased productivity
i kind of took context clues to answer this question

Answer:

B

Explanation:

Because movement of new people with goods to another country or place gives exposure to their cultures

The process of assigning a good, a service, or a resource to one use instead of another describes:.

Answers

Allocation is the process which involves the assigning of goods, services or any such resources for one use, instead of deploying them at other alternatives available.

What is allocation?

The way in which the available resources in the hands of a business organization are deployed for particular uses is known as allocation of such resources by a firm.

Hence, the significance of allocation is given above.

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What does it mean to investors when a bond reaches full maturity?

a) the investor has waited for the 50 year mandatory holding period.
b) the investor owes the payment in full to the financial institution.
c) the investor can sell it on the open market and earn the value on that day.
d) the investor is owed the principle and the interest earned on the
investment.

Answers

Dddddddddddddddddddd

Scenario 10-1 The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 1,000th gallon of gasoline entails the following: a private cost of $3.10 a social cost of $3.55 a value to consumers of $3.70 Refer to Scenario 10-1. From the given information, it is apparent that

Answers

It is apparent that the production of gasoline involves a negative externality which means that the market will produce a larger quantity of gasoline than is socially desirable.

What is a negative externality?

In economics, this refers to a condition that exists when the production or consumption of a product results in a cost to a third party.

Hence, based on the information given on the gasoline price and values, it is deduced that the production of gasoline involves a negative externality which means that the market will produce a larger quantity of gasoline than is socially desirable.

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Given: Cost of goods manufactured of $410,000; beginning finished goods inventory of $110,000 and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold. Multiple choice question. $395,000 $535,000 $520,000 $425,000

Answers

The unadjusted cost of goods sold is $395,000

What is cost of goods sold?

Cost of Goods Sold (COGS) is what measure the direct cost incurred in the production of any goods or services.

The unadjusted cost of goods is computed as:

= Cost of goods manufactured - ( Ending finished goods -Beginning finished goods inventory )

= $410,000 - ( $125,000 - $110,000)

= $410,000 - $15,000

= $395,000

Hence, the unadjusted cost of goods sold is $395,000

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The top five cities where venture capitalists are investing their money represent 10% of the global total.
True
False

Answers

it is false statement that the top five cities where venture capitalists are investing their money represent 10% of the global total.

What is a Venture capital?

This refers to the managerial expertise provided by investors to startup firms with long-term growth potential.

However, it is false that the top five cities where venture capitalists are investing their money represent 10% of the global total.

Therefore, the statement is a false statement.

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An employee works 47 hours (47 - 40 were overtime hours) during a workweek in December of 2021. He earns $39/hour, with his employer paying 1.5 times the regular rate of pay for overtime hours. To date, he has earned $140,950 during the year. He has requested that his employer withhold 6% of gross pay, which is to be contributed to a 401(k) plan.

Taxable income for federal income tax withholding = $
Taxable income for social security tax = $
Taxable income for medicare tax = $

Answers

The amount of tax will be:

Taxable income for federal income tax withholding =$1,851.33Taxable income for social security tax =$1,851.33Taxable income for medicare tax = $1,851.33

How to calculate the tax?

Regular Pay (40×39) = $1,560.00

Overtime Pay (7×39×1.5) =$ 409.50

Gross Pay = $1,969.50

Less: 401(k) plan Contribution (1969.50×6%) =$ 118.17

Taxable Amount = $1,851.33

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Financial accountants:_________
a) provide information to external entities that allows them to evaluate business performance.
b) summarize the company's production activities in a way that allows managers to make decisions.
c) have a primary focus on providing managers within the organization with reports to make good business decisions.
d) work with government lobbyists to push for more favorable accounting regulations.

Answers

Financial accountantssummarize the company's production activities in a way that allows managers to make decisions.

What are financial accounts?

Financial accounts are the accounts that show the profit and loss, expenses and savings, assets and liability, debts and outstanding amount.

Financial accounts help the company to take the future decision that is based on the previous occurrence in the organization. Some of the financial accounts are cash flow statement profit and loss, balance sheet and others.

Thus, option B is correct.

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What do hr teams today increasingly see themselves as?

Answers

In today's competitive and globalized business environment, HR teams are responsible for developing human capital in organizations.

What is the role of the Human Resources department?

It is a team responsible for managing the employees in an organization, such as recruiting, selecting and aligning potential candidates to positively contribute to the organization's goals.

Therefore, currently, human capital is the differential for the company to be well positioned in the market, and HR is responsible for managing the talents that will generate the necessary innovation for the business.

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Which is an easy-to-read, monthly statement that clearly lists medicare claims information?.

Answers

An easy-to-read, monthly statement, that clearly lists medicare claims information is a Medicare summary notice.

What is a Medicare summary notice?

MSN is a statement received by the people with Original Medicare recipients every three months in the mail for services covered by Medicare Part A and Part B.

It is a system that notifies consumers about  Medicare benefit decisions. You will not receive an MSN for that 3-month period if you do not receive any services or emergency aid during that time.

This notification might assist you in keeping track of your and in expenses and ensuring that you were correctly invoiced for the treatments you experienced.

It also helps to compare the information on your notification with the healthcare providers', statements, and receipts.

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Two years ago, rhonda received a gift of 100 shares of common stock from her parents. the fair market value of the stock on the date of the gift was $80 per share. her parents had purchased the stock four years earlier at $60 per share. rhonda sold this stock for $102 per share last week. what was rhonda's per-share basis in the stock when it was sold

Answers

Rhonda's per-share basis in the stock when it was sold was $80 per share.

What is the tax basis of an asset?

Rhonda's per-share basis in the stock sold refers to her cost tax basis.   The tax basis of an asset is the amount of capital investment when computing for tax purposes.

The purchase or cost tax basis may be higher or less than the sale tax basis.

When the purchase tax basis is higher than the sale tax basis, it gives rise to a capital loss and vice versa.

Thus, Rhonda's per-share basis in the stock when it was sold was not $60 or $102 but $80 per share.

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E-commerce ________ is the ability of an organization to create a strong presence among consumers in many places, with minimal time constraints, to sell them products and services.

Answers

E-commerce ubiquity is the ability of an organization to create a strong presence among consumers.

What is E-commerce?

E-commerce can be regarded as the process involving crating a good presence so as to sell products to the consumer.

Therefore, it involves ability to sell in different locations.

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In the top-down strategic planning approach, all strategic intelligence and decision-making responsibilities rest primarily on the

Answers

Answer:

Chief Executive Officer (CEO)

Explanation:

A company has common stock with a $10 par value and fair market value of $15. The company exchanges 1,000 share of this common stock for an acre of land. I. The land will be debited for $10,000. II. Common stock account will be credited for $10,000 and no additional paid-in capital will be recorded.

Answers

In the given situation above, the journal entry will be that the land will be debited for $15,000; and the common stock account will be credited with $10,000 and the additional paid up capital account will be credited for $5,000. So, the given options do not hold true.

What is a journal entry?

A chronological recording of financial or accounting transactions of an organization in the journal books of the corporation, as and when they occur, is known as a journal entry.

Hence, the given conditions regarding the journal entry do not hold true.

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which statement best describes how the Fed responds to recessions?

It sells more securities.
It charges banks more interest.
It increases reserve requirements.
It increases the money supply.

Answers

The federal government responds to recession by increasing the money supply in a country.

What is Recession?

Recession is term used to describe a general economic contraction which is identified by a fall in the gross domestic product of a country.

    Before a country is said to be in recession, the GDP of that country must have fallen in  two successive quarters.

The feds respond to recession by increasing the money supply in order to stimulate the local economy.

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Answer: D - It increases the money supply.

Explanation: Edge 2022

Higher cash flows earlier in a project's life are Blank______ valuable than higher cash flows later on.

Answers

When we get higher cashflows in a projects life at an earlier period, these are more valuable than later on.

Why are earlier cashflows more valuable?

When we receive higher cashflows earlier on in a project's life, the discounted values of these cashflows will be higher.

This is as opposed to receiving them later on where the discounted values will be lower on account of there being a longer period to discount over.

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Internal rate of return (IRR) must be compared to the Blank______ rate in order to determine the acceptability of a project.

Answers

The internal rate of return (IRR) must be compared to the required return rate in order to determine the acceptability of a project.

What is the meaning of the Internal Rate of return?

The internal rate of return (IRR) is a metric utilized in economic evaluation to estimate the profitability of ability investments.

IRR is a reduction price that makes the net present value (NPV) of all cash flows identical to 0 in a reduced cash flow evaluation. IRR calculations depend on the equal components as NPV does.

Thus, The internal rate of return (IRR) must be compared to the required return rate in order to determine the acceptability of a project.

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6. The effects of inflation Suppose Friendly Airlines is considering signing a long-term contract with the union representing its pilots. Friendly Airlines and the union both agree that real wages should increase by 3%. Inflation is expected to be 6%, so they agree on a 9% nominal wage increase. Now, suppose inflation turns out to be lower than expected, coming in at 5%. This would the union and Friendly Airlines because the real wage increase would now be .

Answers

If inflation is lower than expected, it would benefit the union and it would be a disadvantage to Friendly Airlines because the real wage increase would now be 4%.

What is inflation?

Inflation is when there is a general increase in the general price level of an economy. If inflation turns out to be lower than expected, the employers would be at a disadvantage while the employees would be at advantage because there would be an increase in their real wages.

Increase in real wage = real increase in wage + (expected inflation + actual inflation)

3% + (6% - 5%) = 4%

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What is the depreciation tax shield if EBIT is $600, depreciation is $1,800, and the tax rate is 30 percent

Answers

The depreciation tax shield based on the EBIT, the tax rate and the depreciation is $540.

How do you find the depreciation tax shield?

This can be found as:

= Depreciation x Tax rate

Solving gives:

= 1,800 x 30%

= $540

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A mutual fund is quoted at $16.56 NAV and $18.00 POP. The sales charge is A) 8.50% B) 7.75% C) 7.50% D) 8%

Answers

Based on the Mutual fund's NAV and the POP, the sales charge can be found to be D. 8%.

How is a Mutual fund's sales charge calculated?

You can find the sales charge through the formula:

= (POP - NAV) / POP x 100%

Solving gives:

= (18 - 16.56) / 18 x 100%

= 1.44 / 18 x 100%

= 8%

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A dollar today is worth ______ a dollar in the future because it can be reinvested. Multiple choice question. the same as more than less than

Answers

Answer:

A dollar tomorrow is worth less than a dollar today, because if you invest the dollar you have today, you'll have more than a dollar tomorrow.

A dollar in the present day is worth less than that of the dollar in the future, because of returns generated over reinvestment.

What is reinvestment?

A process of investing something, which is invested more than once after generating returns over it, is known as a reinvestment. A currency is the most widely reinvested class of asset, and generally its value appreciates.

Hence, the significance of reinvestment is given above.

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For entrepreneurs, the closer the solution relates to the actual problem the customer is experiencing, the more likely that there will be immediate _____ upon completion of product development.

Answers

For entrepreneurs, the closer the solution relates to the actual problem the customer is experiencing, the more likely that there will be immediate sales upon completion of product development.

Reason for early sales

When a particular products meet the demand of people, there is possiblity of sales immediately after the product is release.

Hence, product should be targeted towards demand.

Therefore, For entrepreneurs, the closer the solution relates to the actual problem the customer is experiencing, the more likely that there will be immediate sales upon completion of product development.

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