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Help - two on financial management issues

(1) a business with "1 / 20, 12/30," the condition of the goods purchased 10,000 yuan, assume that the business 20 days later (not more than 30 days) of payment, then the business to give cash discounts because of the burden of the cost? () A.15% B.24% C.32% D.36.4% (2) common stock price of 10.50 yuan, financing costs shares for 0.50 yuan, 1.5 yuan in the first year payment of dividends, dividend growth rate of 5% The cost of the common stock is closest to () (Note: I need to problem-solving process, thank you)

Posted on 2013-05-09 15:01:16

All Answers


Your first question whether there is an error? Conditions seems to "1 / 20, n/30" to resolve it. In accordance with the "1 / 20, n/30" condition, the process is: to give up the burden of the cost of the cash discount = 1% * 360 / [(1-1%) * (30-20)] = 36.36%, the answer choice D. The second question, the cost of common stock formula = D1 / [v0 (1 + f)] + g, where D1 = 1.5, V0 = 10.5, f = 0.5/10.5 = 0.0476, g = 5%, so the cost is the closest 20%.

2013-05-09 15:01:16
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