Mavs Inc. wishes to determine its cost of common stock equity, rs. The market price, P0, of its common stock is $40.07 per share. The firm expects to pay a dividend, D1, of $4.20 at the end of the coming year, 2021. The dividends paid on the outstanding stock over the past 6 years (2015â2020) were as follows:

2015 $3.60
2016 3.65
2017 3.70
2018 3.85
2019 4.00
2020 4.10

What is the cost of common stock equity financing?

Answer:

13.12%

Explanation:

Using the Gordon growth rate model, the cost of common stock equity can be determined using the formula below:

cost of common equity=expected dividend/current market price+growth rate

expected dividend=dividend in a year's time=D1= $4.20

current market price=P0=$40.07

The growth rate of the dividend can be ascertained by using the future value below:

FV=PV*(1+g)^n

FV=2020 dividend=$4.10

PV=2015 dividend=$3.60

g=growth rate=unknown

n=numbr of years between 2015 and 2020=5(dividend has grown for only 5 years not 6 years)

$4.10=$3.60*(1+g)^5

$4.10/$3.60=(1+g)^5

$4.10/$3.60 can be rewritten thus($4.10/$3.60)^1

($4.10/$3.60)^1=(1+g)^5

divide indexes on both sides by 5

($4.10/$3.60)^(1/5)=1+g

g=($4.10/$3.60)^(1/5)-1

g=2.64%

cost of common equity=($4.20/$40.07)+2.64%

cost of common equity=13.12%

John's uncle donated a truck to his company, John's Corporation. The truck had an original cost of $95,000, a book value of $40,000, and a fair value of $60,000. The journal entry by John's Corporation to record this donated asset will include a:

a. debit Truck for $95,000 and credit Gain for $35,000.
b. debit Truck for $60,000 and credit Gain for $20,000.
c. debit Truck for $60,000 and credit Gain for $60,000.
d. debit Truck for $95,000 and credit Gain for $95,000.

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Accumulated depreciation 111,000 119,000
Fair value 96,000 77,000

To equalize the exchange, Phifer paid Robers $19,000 in cash.

Required:
Record the exchange for both Robers and Phifer. The exchange has commercial substance for both companies.

Help help help help help help help help

Temporary Aid to Needy Families (TANF) a. A welfare program that replaced AFDC in 1996. It introduced a new education requirement that was designed to push welfare recipients into special college and GED programs. b. A welfare program that replaced Social Security in 1965. It introduced a work requirement that was designed to push welfare recipients into the low wage labor market. c. None of the other answers. d. A welfare program that replaced AFDC in 1996. It eliminated the New Deal era work requirement that many people believed was designed to effectively re-enslave African Americans. e. A welfare program that replaced AFDC in 1965. It introduced a work requirement that was designed to push welfare recipients into the low wage workforce.

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BONUS: A riskier bond usually comes from a corporation that has a ______ (low/high) credit rating.

Free if I am voted brainiest and like!
Next time will be Moree than 50.... :)

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10 roles of insurance in a business

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BURNETT v. PURTELL
Who were the plaintiff and defendant? Were they merchants?
Describe the sales transaction.
Was there tender of delivery of the goods? Why is this issue important to the outcome of the case?
Who bore the risk of loss when the goods were destroyed?

The newest employee at Edwards Escrow Co., Adam Riley, is handling the escrow
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Based on the comparison between the mean annual dividend rate for companies in utilities and banking, the 95% confidence interval shows an interval of 1.28 to 6.28 for the difference. This result indicates that _______.

Multiple Choice

A. the annual dividend rate in the utilities industry is significantly less than the annual dividend rate in the banking industry

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C. there is no significant difference between the two rates

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2. There is a foreign entity (China) company and the books and records are not translated. It is unclear as to whether it is owned by the owner or the corporation.
3. The staffing is light and the human resources person is doing the billing and the payroll. There are no management concerns with this person.
4. There is a $1 million line of credit for the company with a major bank.
5. The company uses an add-on to QuickBooks for the time and billing (services company) and QuickBooks for the general ledger.
6. The reimbursement policy is nonconforming to the IRS rules.
7. There are three unrelated owners that are all engineers by training.
As an Outside CPA/Auditor:
I. As the outside CPA, what ethical obligations to you have to the professional for taking an assignment like this? Specifically, what type of work is possible?
II. What threats are posed to the outside CPA?
III. What safeguards can be applied at the outside CPA level?
IV. How should the China business be dealt with?
V. What obligations do you have for the potential tax issues? How would you document or discuss these issues?
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I. If you work to work for the company as the CPA controller, what threats do you see on the onset?
II. What safeguards can you put in place?
III. How would you handle the remaining staff?
IV. If the human resources staff has been working well at the job, then what is the harm of letting the payroll remain with HR?
V. What would you insist be in your employment agreement?

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