Shamas famous restaurants expects to pay a common stock dividend of $1.50 per share next year (d1). dividends are expected to grow at a 4% rate for the foreseeable future. shamas’ common stock is selling for $18.50 per share and issuance costs are $3.50 per share. what is shamas cost of external equity?

The company's external equity comes from those funds raised from public issuance of shares or rights. The cost of external equity is the minimum rate of return which the shareholders supply new funds by purchasing new shares to prevent the decline of the market value of the shares. To compute the cost of external equity, we should use this formula: 

Ke = (DIV 1 / Po) + g 

Ke = cost of external equity 

DIV 1 = dividend to be paid next year 

Po = market price of share 

g = growth rate 

In the problem, the estimated dividend to be paid next year is $1.50. The market price is $18.50 and the growth rate is 4%. 

Substituting the given to the formulas, we need to divide $1.50 by $18.50 giving us the result of 8.11% plus the growth rate; this would yield to the result of 12.11% cost of external equity.

At certain times banks may not be willing to fully loan out all of their _____________ and customers may not be willing to borrow.

The __________ job market is comprised of internet job boards, want ads, newspaper ads, and radio advertisements. these are media sources where employers will proactively seek employees.

The dishonor of an instrument relieves secondary parties of liability.
a. True
b. False

Students who are completing classes and school work at their own pace, in any location or any time, are often known as

Krizum industries makes heavy construction equipment. the standard for a particular crane calls for 24 direct labor-hours at $16 per direct labor-hour. during a recent period 850 cranes were made. the labor rate variance was zero and the labor efficiency variance was $8,800 unfavorable. how many actual direct labor-hours were worked?

Consider two cigarette companies, pm inc. and brown inc. if neither company advertises, the two companies split the market and earn $50 million each. if they both advertise, they again split the market, but profits are lower by $10 million since each company must bear the cost of advertising. yet if one company advertises while the other does not, the one that advertises attracts customers from the other. in this case, the company that advertises earns $60 million while the company that does not advertise earns only $30 million. refer to scenario 17-4. if these two companies collude and agree upon the best joint strategy,

a. neither company will advertise.

b. both companies will advertise.

c. pm inc. will advertise but brown inc. will not.

d. brown inc. will advertise but pm inc. will not.

Susan, 56 years of age, and her daughter beverly, 28 years of age, are both secretaries. they both apply for the same job, and although susan has much more experience, the company hires beverly because, as one of the company's owners says, "who wants a wrinkled old lady to work in our office?" this attitude reflects

What is the future value of $1,000 after six months earning 12% annually?

Burlington coat factory warehouse, inc., had a dress code that required male sales clerks to wear business attire consisting of slacks, shirt, and necktie. female saleschecks, by contrast, were required to wear a smock so that customers could readily identify them. karen o'donnell and other female employees refused to wear the smock. instead they reported to work in business attire and were suspended. after numerous suspensions, the female employees were fired for violating burlington's dress code policy. all other conditions of employment, including salary, hours, and benefits, were the same for female and male employees. (o'donnell v. burlington coat factory warehouse, inc., 656 f.supp. 263 (s.d. ohio 1987) see employment discrimination was the dress code policy discriminatory

A team has been established to solve a problem with an industrial adhesive used by the firm. the three members are the installer, an engineer, and the sales representative for the adhesive manufacturer, but the team does not have a specific leader. this team can be called a ________ team.

A retail store credited the sales revenue account for the sales price and the amount of sales tax on sales. if the sales tax rate is 5% and the balance in the sales revenue account amounted to $294,000, what is the amount of the sales taxes owed to the taxing agency? $14,000 $14,700 $280,000 $294,000

Art and technology interact in the appearance of the volkswagen beetle as newer safety standards affect the _____ of the vehicle.

If a model can be applied successfully by people in all areas and levels of an organization, it is said to possess the trait of:

Naomi is preparing the company’s cash budget. when preparing the cash receipts section, she included cash sales, receipts of interest, receipts of dividends, and proceeds from planned sales of plant assets. what error did naomi make? will cash receipts be too high or too low as a result of this m

A large bureaucratic organization is about to undertake a massive change in the way they do business. these changes will include redesigning processes

Now that you have made the necessary product adjustments, what will you do next

The primary explanation of trade among nations is ricardo's theory of:

When john and mary go on their first date, john reveals extensive personal information to mary. what is the likely result of john's self-disclosure?

A singles business aims its promotions toward singles between the ages of 25 and 40 who reside in a specific county. the business has ________.

The fact that iq scores have, on average, risen over the past century is called the ________ effect.

James has just joined coratech systems, where he has been assigned to paul and natalie for sources of information about the company. paul and natalie introduce james to others at coratech, give him an office tour, and assure him that they will meet him regularly for the first few weeks, to help him in the transition to the new company. in this scenario, paul and natalie are part of the coratech's _____.

Consumers generally shop and compare on their computers, then purchase with their smartphones.​truefalse

Six months ago, several of molly's friends joined the trimtime fitness center. each of them participated in trimtime's weight-reduction and fitness regimen. all reported substantial weight reduction, and all are visibly slimmer. molly is convinced. she joins trimtime and enrolls in the same program, hoping and expecting to see the same results. she is especially delighted to learn that trimtime had adjusted its program to make it even more effective in a shorter period of time. is this an analogical argument or a generalization?

Jones company reported pretax book income of $400,000. included in the computation were favorable temporary differences of $50,000, unfavorable temporary difference of $20,000, and favorale permanent differences of $40,000. book equivalent of taxable income is:

Compensatory damages replace what was lost because of what the breaching party did and for this reason are often said to "make the person whole." true or false

Technological advances have resulted in fewer opportunities for small businesses abroad.
a. True
b. False

If a corporation has two classes of common stock, what is typically unique about the second or class b common stock?

Which of the following will be recorded in the owner’s equity column as an increase

If the paper reports a particular corporate bond price as 79.5, the price an investor would have to pay is ________.

Coordination and policy harmonization problems are largely a function of the number of countries that seek agreement.

a. True

b. False