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You own a large piece of land which you are using for setting up a manufacturing unit. In this case; O a. You have incurred an opportunity cost in relation to the land O b. You have incurred a sunk cost in relation to the land ○ c. You have incurred a capital cost in relation to the land ○ d. You have incurred no cost in relation to the land O e. You have incurred a short-term cost in relation to the land Suppose that your company is expected to pay a dividend of $1.50 per share next year. The growth in dividend has been steady at 5.1% p.a. and the market expects this growth to continue. If the share is priced at $25 per share, is a 4% cost of equity tenable? O a. No O b. Yes When you buy common shares; ○ a. you cannot sell your shares to a third party. O b. You become a part owner of the company ○ c. You receive interest on your investment O d. You become a company's debtor ○ e. You become the company's creditor If you purchase a 10% p.a. 3-year coupon bond today and hold it till the maturity date, it gives you a compounded return of 15%. How much will you need to pay today to buy one such bond? ○ a. a premium price O b. $1,124.34 approximately ○ c. $885.84 approximately O d. $1,000 O e. Cannot answer with the given information

You own a large piece of land which you are using for setting up a manufacturing unit. In this case; O a. You have incurred an opportunity cost in relation to the land O b. You have incurred a sunk cost in relation to the land ○ c. You have incurred a capital cost in relation to the land ○ d. You have incurred no cost in relation to the land O e. You have incurred a short-term cost in relation to the land Suppose that your company is expected to pay a dividend of $1.50 per share next year. The growth in dividend has been steady at 5.1% p.a. and the market expects this growth to continue. If the share is priced at $25 per share, is a 4% cost of equity tenable? O a. No O b. Yes When you buy common shares; ○ a. you cannot sell your shares to a third party. O b. You become a part owner of the company ○ c. You receive interest on your investment O d. You become a company's debtor ○ e. You become the company's creditor If you purchase a 10% p.a. 3-year coupon bond today and hold it till the maturity date, it gives you a compounded return of 15%. How much will you need to pay today to buy one such bond? ○ a. a premium price O b. $1,124.34 approximately ○ c. $885.84 approximately O d. $1,000 O e. Cannot answer with the given information

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter11: Performance Evaluation And Decentralization
Section: Chapter Questions
Problem 7MCQ: The key difference between residual income and EVA is that EVA a. uses the actual cost of capital...
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You own a large piece of land which you are using for setting up a manufacturing unit. In this case; O a. You have incurred an opportunity cost in relation to the land O b. You have incurred a sunk cost in relation to the land ○ c. You have incurred a capital cost in relation to the land ○ d. You have incurred no cost in relation to the land O e. You have incurred a short-term cost in relation to the land Suppose that your company is expected to pay a dividend of $1.50 per share next year. The growth in dividend has been steady at 5.1% p.a. and the market expects this growth to continue. If the share is priced at $25 per share, is a 4% cost of equity tenable? O a. No O b. Yes
Transcribed Image Text:You own a large piece of land which you are using for setting up a manufacturing unit. In this case; O a. You have incurred an opportunity cost in relation to the land O b. You have incurred a sunk cost in relation to the land ○ c. You have incurred a capital cost in relation to the land ○ d. You have incurred no cost in relation to the land O e. You have incurred a short-term cost in relation to the land Suppose that your company is expected to pay a dividend of $1.50 per share next year. The growth in dividend has been steady at 5.1% p.a. and the market expects this growth to continue. If the share is priced at $25 per share, is a 4% cost of equity tenable? O a. No O b. Yes
When you buy common shares; ○ a. you cannot sell your shares to a third party. O b. You become a part owner of the company ○ c. You receive interest on your investment O d. You become a company's debtor ○ e. You become the company's creditor If you purchase a 10% p.a. 3-year coupon bond today and hold it till the maturity date, it gives you a compounded return of 15%. How much will you need to pay today to buy one such bond? ○ a. a premium price O b. $1,124.34 approximately ○ c. $885.84 approximately O d. $1,000 O e. Cannot answer with the given information
Transcribed Image Text:When you buy common shares; ○ a. you cannot sell your shares to a third party. O b. You become a part owner of the company ○ c. You receive interest on your investment O d. You become a company's debtor ○ e. You become the company's creditor If you purchase a 10% p.a. 3-year coupon bond today and hold it till the maturity date, it gives you a compounded return of 15%. How much will you need to pay today to buy one such bond? ○ a. a premium price O b. $1,124.34 approximately ○ c. $885.84 approximately O d. $1,000 O e. Cannot answer with the given information
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