Selena owns and operates a Global Goods grocery store. Although her store is independently owned and operated, she has signed an
1 answer:
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Answer:
Task a:
The answer is $24,500.
Task b:
The answer is 17%
Explanation:
<h2>Task a:</h2><h3>What is the maximum amount of new capital that can be raised at the LOWEST component cost of EQUITY?</h3><h3>Solution:</h3>We already know the following:
Projected net income = $21,000
Payout ratio = 30%
Retention ratio = 70%
Debt share = 40%
Equity share = 60%
Maximum amount of capital to be raised at the lowest component cost of equity = Projected net income ×
= $21,000 ×
= $24,500
<h3>Answer:</h3>The maximum amount of new capital that can be raised at the lowest component of equity is $24,500.
<h2>Task b:</h2><h3>What is the component cost of equity by selling new common stock?</h3><h3>Solution:</h3>k(e) (component cost of external equity) = [Dividend (D0)(1 + growth) / stock price(1 - flotation cost)] + growth
Formula:
k(e) = + 0.05
Where
Do = $2.00
G = 0.05
P = $21/88
= ($2.00(1 + 0.05) / $21.88(1-.20)) + 0.05
= ($2.10/$21.88(1-.20)) + 0.05
= ($2.10/$21.88(0.80) + 0.05
= 0.17 or 17%
<h3>Answer: </h3>The component cost of equity by selling new common stock = 17%
Answer:
direct material = $2,000
so correct answer is B. $2,000
Explanation:
given data
total cost = $9,000
consists = 600 units
overhead apply = $3,000
overhead rate = 75% of direct labor
solution
we get here Direct Labor that is
Direct Labor =
Direct Labor = $4000
and we apply here Total Cost that is
Total Cost = direct material + overhead + Direct Labor ..........1
put here value
$9,000 = direct material + $3,000 + $4,000
solve it we get
direct material = $2,000
so correct answer is B. $2,000