Both you and your older brother would like to have $28,500 in 14 years. Because of your success in this class, you feel that you are a more savvy investor than your brother and will be able to earn an annual return of 10.5 percent compared to your brother's 8.7 percent. How much less than your brother will you have to deposit today

Answers

Answer 1

How much less than your brother will you have to deposit today is $1,820.78.

First step

Future value = Present value × (1 + interest rate)^number of years

$28,500 = Present value × (1 + 0.105)^14

Present value= $28,500 ÷ 1.105^14

Present value= $28,500 ÷ 4.04642869977

Present value=$7,043.25

Second step

Future value = Present value × (1 + interest rate)^number of years

$28,500 = Present value × (1 + 0.087)^14

Present value= $28,500 ÷ 1.087^14

Present value= $28,500 ÷3.21524163645

Present value=$8,864.03

Third step

Deposit today=-$8,864.03-$7,043.25

Deposit today= $1,820.78

Inconclusion how much less than your brother will you have to deposit today is $1,820.78.

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Related Questions

briefly explain how undertaking of agricultural modernisation is reducing open - urban employment​

Answers

increased demand for labour

Which amendment to a law made it illegal to discriminate based on pregnancy? Which law was amended?

The (Blank) amendment to the (Blank) law made discrimination based on pregnancy illegal.

First one has a list of these three options.
ADA
PDA
ADEA

Second one has a list of these three options.
Title VII
Title I
Title IV

Answers

Answer:

I believe it's "The PDA amendment to the Title VII law made discrimination based on pregnancy illegal"

Explanation:

You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred stock is 7.50%, and the cost of retained earnings is 11.50%. The firm will not be issuing any new stock. What is its WACC

Answers

Based on the information given the WACC is 12.75%.

Using this formula

WACC = (Weight of debt ×After-tax cost of debt) + (Weight of preferred ×Cost of preferred) + (Weight of common equity × Cost of common equity)

Let plug in the formula

WACC = (0.40× 0.06) + (0.15×0.075) + (0.45 × 0.115)

WACC=0.024+0.01125+0.05175

WACC =0.1275×100

WACC =12.75%

Inconclusion the WACC is 12.75%.

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O False
QUESTION 2
Management is the process of coordinating people and other resources.
O True
O False
QUESTION 2

Answers

Answer:

True

Explanation:

Managing is to look over and control people or things to be sure everyone/everything works as intended.

The process of coordinating the individuals and the related resources is to be considered as management.

Option A is correct.

What is coordination?

Coordination is the act of harmonizing and maintains a healthy synchronization between the activities and the workforce performing them.

The management is the method of synchronize and administer the working roles assigned to the team members or the workforce. This could be done by making a good hierarchy where it directs the work force to whom they are going to report.

Therefore, the provided statement is true.

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Find m2V.


V


W


(2x + 29)


(10x – 27)°


Y

Answers

Answer:

31x

17x

Explanation:

we should add 2x+29

we should subtract 10x and 27

Lucy and Everly, a clothing retail company, wants to collect secondary data on the buying behavior of teenage customers in its new geographic market. Which action will Lucy and Everly most likely take in order to obtain this data

Answers

The action that Lucy and Everly will most likely take is obtaining of data compiled by databases created by marketing research firms within the new geographic market.

Marketing research means a process of gathering, recording, analyzing and drawing conclusion on collected data from potential customers of a product to facilitate decision making.

Main purpose of the marketing research is to provides information which are relevant for decision making in the firm.

A marketing research data are also provided by marketing research firms to firms who need them.

In conclusion, the action that Lucy and Everly will most likely take is obtaining of data compiled by databases created by marketing research firms within the new geographic market.

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Help me pls

Jin is an accountant who works for the national government, auditing the tax returns of large corporations. The pathway of the Government and Public Administration cluster that Jin works in is:

Question 13 options:

Public Management and Administration.


Revenue and Taxation.


Foreign Service.


Planning.

Answers

Revenue and Taxation department is the pathway of the Government and Public Administration cluster that Jin works in.

The department of the Revenue and Taxation is a pathway that exist under the  Public Administration.

The main role of the department of the Revenue and Taxation is to ensure collection of tax in the state, auditing of tax as well as remittance of tax revenue to the Federal coffers.

Hence, the Revenue and Taxation department is the pathway of the Government and Public Administration cluster that Jin works in.

Therefore, the Option B is correct.

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Answer:

Revenue and Taxation.

Explanation:

took the test

Sunland Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2021. In 2021, it changed to the percentage-of-completion method. The company decided to use the same for income tax purposes. The tax rate enacted is 40%. Income before taxes under both the methods for the past three years appears below.
2019 2020 2021
Completed contract $480000 $318000 $156000
Percentage-of-completion 780000 399000 300000
Which of the following will be included in the journal entry made by Sunland to record the income effect?
a. A debit to Retained Earnings for $239400.
b. A credit to Retained Earnings for $228600.
c. A credit to Retained Earnings for $158400.
d. A debit to Retained Earnings for $158400.

Answers

From the computation done, there'll be a debit to retained earnings for 239400.

The retained earnings will be:

= percentage of completion (1 - Tax rate)

Based on the values we've, this will be:

Retained Earnings = 399000 (1 - 40%)

Retained Earnings = = 399000 × 0.6

Retained Earnings = 239400

Therefore, there'll be a debit to retained earnings for 239400.

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HELP

When a consumer is making more money, the demand curve shifts to the right. Why is this?

Answers

The demand curve shifts to the right because the consumer is able to afford larger quantities of the product. I believe the answer is C.


Everfi
You have to match the boxes with the section

Answers

Answer:

Needs : Frappuccino before work each day and winter coat

Wants: monthly loan payment and paying extra on the principal loan amount

Saving: rent on your apartment

Answer:

Explanation:

.

Vaughn Manufacturing reported net income of $185,060 for 2022. Vaughn Manufacturing also reported depreciation expense of $33,860 and a loss of $4,930 on the disposal of plant assets. The comparative balance sheets show an increase in accounts receivable of $16,140 for the year, a $15,330 increase in accounts payable, and a $4,310 increase in prepaid expenses. Prepare the operating activities section of the statement of cash flows for 2022. Use the indirect method

Answers

Answer:

Explanation;i dont know but this answer is wrong

Which of the following defines a short-term goal?

A. tasks that you set to accomplish specific things in a short period of time

B. tasks that must be completed for a job performance evaluation

C. tasks that you must complete that require time and planning that usually take 12 months or more to complete

D. tasks that you think you need to accomplish in the future but need to start working on now

Answers

Answer:

I think its a

Not sure

Explanation:

.....

Partners X, Y and Z have capital balances of $80, 000, $180,000 and $60,000 respectively. Immediately prior to liquidation. Total remaining assets have a book value of $320,000 and assume liabilities have been paid. There is one remaining asset with a fair market value of $70,000. All three partners agree to share profit and loss equally. Z wishes to take the asset with him and start a new business and would accept $70,000 in cash; the remaining partners agree this would be fair. How much cash in addition to the asset would first be distributed to Z before any of the other partners receive anything? a. $100,000 b. $240,000 c. $30,000 d. $50,000

Answers

The cash distributed to Partner Z before the other partners is $60,000.

Data and Calculations:

Book value of assets = $320,000

Fair value of asset = $70,000

                                                     X              Y                Z             Total

Capital balances                $80,000   $180,000  $60,000    $320,000

Total assets available for distribution                                     $390,000

Assets assumed by Z                                          ($70,000)     ($70,000)

Balance                                                                                    $320,000

Distribution to partners  $80,000   $180,00   $60,000    $320,000

Cash distribution to partners depends on the cash realized from the assets.

Thus, the cash distributed to Partner Z before the other partners is $60,000.

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Each week, Namratha updates an online newsletter to share information about interesting topics related to the company. All company employees have access to the newsletter site. This is an example of _______ communication.

Answers

The type of communication which Namratha is using when sharing an online newsletter among employees is:

Internal communication

According to the given question, we are asked to state the type of communication which Namratha is using when sharing an online newsletter among employees.

As a result of this, we can see that because Namratha shares an online newsletter about the company and all the company employees has access to this, then this is an example of an internal communication because it shares the information with people in the office.

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Prepare Cash Budget For 3 Months Brewster Corporation expects the following cash receipts and disbursements during the first quarter of 2016 (receipts exclude new borrowings and disbursements exclude interest payments on borrowings since January 1, 2016)
January February March
Cash receipts $280,000 $300,000 $270,000
Cash disbursements 260,000 340,000 280,000
The expected cash balance at January 1, 2016, is $62,000. Brewster wants to maintain a cash balance at the end of each month of at least $60,000. Short-term borrowings at 1% interest per month will be used to accomplish this, if necessary. Borrowings (in multiples of $1,000) will be made at the beginning of the month in which they are needed, with interest for that month paid at the end of the month. Prepare a cash budget for the quarter ended March 31, 2016.

Answers

Brewster Corporation's Cash Budget for the three months will be prepared as follows:

Cash Budget

                                                January        February         March

Beginning balance                $62,000         $82,000        $60,810

Cash receipts                      $280,000      $300,000     $270,000

Borrowings                                                     19,000          10,000

Total cash available           $342,000       $401,000      $340,810

Cash disbursements            260,000        340,000       280,000

Interest payment on loan                                   (190)             (290)

Ending balance                   $82,000         $60,810      $60,520

Minimum cash balance     $60,000         $60,000     $60,000

Data and Calculations:

                                        January        February         March

Beginning balance         $62,000         $82,000       $60,810

Cash receipts               $280,000      $300,000    $270,000

Borrowings in February and March = $19,000 and $10,000

Interest payment on loans (February) = $190 ($19,000 x 1%)

Interest payment on loans (March) = $290 ($29,000 x 1%)

Required minimum monthly cash balance = $60,000

Thus, Brewster Corporation's cash budget for the first quarter of 2016 shows a cash balance of $60,520 with a loan of $29,000.

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20) Tudor's Deli and Catering could have sold their delivery van on December 31, 2010 for $16,000. If they
could sell the same van on December 31, 2011, for $13,000, then the economic depreciation in 2011 for this
van

Answers

Answer:

13000-16000=3000

The property depreciated for 18.75 percent

Would you want to work for a company that has chosen to be a conscious marketer? Why or why not? Support your decision by discussing at least one positive and one negative about working for this kind of company.

Answers

Answer:

You would want to work for one because it had a lower chance of getting closed or loosing money. A positive is wiser spending. A con is not taking all the risks.

Explanation:

Hope this helps!

Why is it challenging to develop a problem statement for a project?

Answers

Answer:

People often find it extremely difficult to recognize and document the real problem, partly because they focus on the wrong things, generally symptoms rather than cause, and make incorrect presumptions of how the process works. ... Identify the problem, opportunity or challenge. Define current performance measures.

Explanation:

hope it helps

Classify the type of data analytics ​(descriptive, diagnostic,​ predictive, prescriptive, or adaptive and​ autonomous) being used in each of the following situations.a. McGowan Company provides managers with regular Key Performance Indicator (KPI) dashboards. b. Zerrot Corporation issues monthly revenue reports. c. Wheelson Company uses customer analytics and sales history to determine how to drive repeat purchases by customers. d. Courtyard Freight investigates the cause of slow shipments in the southeastern region. e. Medavoy Operations uses statistical software to forecast sales. f. Johnson Stores, Inc., drills down through data to find out which marketing activities were most effective in generating sales. g. Michelson Corporation uses machine learning, artificial intelligence, and algorithms to continually make decisions in real-time about which sales promotions to run in each market.

Answers

Based on the definitions of these data analytic types, the following are true:

a. Descriptive analysis b. Descriptive analysis c. Prescriptive analysis d. Diagnostic analysis e. Predictive analysis f. Diagnostic Analysis g. Adaptive and Autonomous analysis

Descriptive analysis works by showing an overview of the current situation in the company and so would work well for McGowan Company and Zerrot Corporation.

Prescriptive analysis offers solutions to help a company achieve a goal and so is best to describe Wheelson Company.

Diagnostic analysis allows for a company to find out what the real problem is in a situation so describes Courtyard Freight and Johnson Stores.

Predictive is used to predict future scenarios and so describes Medavoy Operations forecasting.

Adaptive and Autonomous use machine learning and artificial intelligence so this describes Michelson Corporation.

In conclusion, there are different types of data analytics that can be used.

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The annual dividend rates for a random sample of 16 companies in three different industries, utilities, banking, and insurance, were recorded. The ANOVA comparing the mean annual dividend rate among three industries rejected the null hypothesis that the dividend rates were equal. The mean square error (MSE) was 3.36. The following table summarized the results:

Utilities Banking Insurance
Number Sampled 5 5 6
Mean Annual Dividend Rate 11.62 15.4 17.4
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

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

C. there is no significant difference between the two rates

D. the interval contains a difference of 5.00

Answers

Based on the information given, the results show that A.The annual dividend rate in the utility industry is significantly less than the annual dividend rate in the banking industry.

A dividend rate simply means a financial ratio that is important as it shows how much a company pays out in dividends every year relative to the stock price of the company.

In this case,  the 95% confidence interval shows an interval of 1.28 to 6.28 for the difference. This implies that the annual dividend rate in the utilities industry is significantly less than the annual dividend rate in the banking industry.

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On the last day of its current tax year, Buy Rite LLC received $390,000 when it sold a machine it had purchased for $270,000 three years ago to use in its business. At the time of the sale, the basis in the equipment had been reduced to $230,000 due to tax depreciation taken. How much did the members’ self-employment earnings from Buy Rite increase when the equipment was sold? [Hint: See IRC §1402(a)(3).]

Answers

Answer:

1,402

Explanation:

Bobby decides to sell lemonade on a hot summer day. If Bobby sells 25 glasses of lemonade for $3.00 per cup, and his average total cost is $2.60, what are Bobby's economic profits for the day

Answers

Answer:

$0.60

Hope this helps!!

Please tell me if I have made an error, I enjoy learning from my mistakes

The economic profit that is earned by Bobby on the selling lemonade glasses is $10.

What is sales revenue?

Sales revenue is the income being obtained by an entity when they sold the goods to customers.

Given values:

Total revenue: $75 (25 glasses X $3)

Average total cost: $65 ( 25 glasses X $2.60)

Computation of the total economic profit:

[tex]\rm\ Economic \rm\ profit=\rm\ Total \rm\ revenue-\rm\ Average \rm\ total \rm\ cost\\\rm\ Economic \rm\ profit=\$75-\$65\\\rm\ Economic \rm\ profit=\$10[/tex]

Therefore, the amount of economic profit is $10 received to Bobby after making sale.

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Eduardo wants to purchase stock in a company that is headquartered in Australia. Eduardo

Multiple Choice

A. can buy the shares from a broker on a U.S. exchange.

B. cannot legally own the stock of an Australian corporation.

C. will have to place her order through the Sydney Stock Exchange.

D. must obtain an investor visa to complete the purchase.

Answers

The answer is: A - can buy the shares from a broker on a U.S. exchange.

Talese would like to claim her granddaughter, Natalia, as her qualifying child so she can claim the Earned Income Tax Credit (EITC). However, Natalia's mother, Taye, is also eligible to claim Natalia as her qualifying child for EITC purposes. As Talese's tax preparer, what information would you share with Talese

Answers

Explanation:

Taye holds a higher right and may claim EITC based on Natalia because Taye is natalia parent

Because Taye is Natalia's parent, Taye has a larger claim and may make an EITC ( Earned Income Tax Credit) claim based on Natalia.

What is Earned Income Tax Credit?

Low- to moderate-income employees and their families can benefit from tax breaks thanks to the Earned Income Tax Credit (EITC). If you are eligible, you can use the credit to lower your tax liability and perhaps boost your refund. For working low- to moderate-income people and couples, especially those with children, the federal earned income tax credit (EITC or EIC) is a refundable tax benefit.

The number of children and the recipient's income is factors that affect the EITC benefit amount. Adults with low incomes who are not parents are eligible. An individual or couple must meet conditions including relationship, age, and shared domicile in order to claim one or more people as their qualifying kids. EITC develops gradually and reaches a medium-length plateau.

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why is international employment important​

Answers

The importance of foreign employment are:
1) Country can get lots of foreign currency as the remittance which can be used to establish industries in the country
2) People who go work overseas to work can learn different skills and technology which can be beneficial for the development for our own country

Discussion Topic
Think of an unanticipated major expense that you might face in the next five years.
Discuss how you will ensure that it does not devastate you financially.

Answers

Answer:

An unanticipated major expense that might happen in the next five years would be my car breaks down. I can ensure this inconvenience does not devastate me financially by starting a savings account. Starting a savings account can and will help me in times of need. I can't access the money unless if I really need it.  

Explanation:

the Answer:

Examples are groceries, the electric bill, fuel bills, taxes and insurance to mention a few. Unexpected expenses are those expenses you did not see coming. An example would be going for the inspection of your car and not passing because there is something that must be repaired.

Explanation:

On-shelf in stock percentage best describes a product availability metric for a ______.

Answers

Based on the information given, it can be deduced that on-shelf in stock percentage relates to the retailer.

It should be noted that on shelf in stock percentage simply means the measurement of the percentage of time that a particular product will be available on a shelf in a store.

On-shelf in stock percentage best describes a product availability metric for a retailer. This simply means a business where consumers buy goods from.

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Stargel Inc. common stock was $119.70 on December 31, 2014.
Stargel Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 2014 and 2013
2014 2013
Retained earnings, January 1 . . . . . . . . . . . . . .$5,375,000 $4,545,000
Add net income for year . . . . . . . . . . . . . . . . . . . 900,000 925,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$6,275,000 $5,470,000
Deduct dividends:
On preferred stock . . . . . . . . . . . . . . . . . . . . . . $ 45,000 $ 45,000
On common stock. . . . . . . . . . . . . . . . . . . . . . . . .50,000 50,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 95,000 $ 95,000
Retained earnings, December 31 . . . . . . . . . . .$6,180,000 $5,375,000
Stargel Inc.
Comparative Income Statement
For the Years Ended December 31, 2014 and 2013
2014 2013
Sales (all on account) . . . . . . . . . . . . . . . . . . . $10,050,000 $9,450,000
Sales returns and allowances . . . . . . . . . . . . . . .50,000 50,000
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,000,000 $9,400,000
Cost of goods sold. . . . . . . . . . . . . . . . . . . . . . 5,350,000 4,950,000
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,650,000 $4,450,000
Selling expenses . . . . . . . . . . . . . . . . . . . . . . .$ 2,000,000 $1,880,000
Administrative expenses . . . . . . . . . . . . . . . . . 1,500,000 1,410,000
Total operating expenses . . . . . . . . . . . . . . . . $ 3,500,000 $3,290,000
Income from operations . . . . . . . . . . . . . . . . . $ 1,150,000 $1,160,000
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . .150,000 140,000
$ 1,300,000 $1,300,000
Other expense (interest) . . . . . . . . . . . . . . . . . . 170,000 150,000
Income before income tax . . . . . . . . . . . . . . . $ 1,130,000 $1,150,000
Income tax expense . . . . . . . . . . . . . . . . . . . . . .230,000 225,000
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 900,000 $ 925,000
Stargel Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1.
20Y2 20Y1
Assets
Current assets:
Cash $500,000 $400,000
Marketable securities 1,010,000 1,000,000
Accounts receivable (net) 740,000 510,000
Inventories 1,190,000 950,000
Prepaid expenses 250,000 229,000
Total current assets $3,690,000 $3,089,000
Long-term investments 2,350,000 2,300,000
Property, plant, and equipment (net) 3,740,000 3,366,000
Total assets $9,780,000 $8,755,000
Liabilities
Current liabilities $900,000 $880,000
Long-term liabilities:
Mortgage note payable, 10% $200,000 $0
Bonds payable, 10% 1,500,000 1,500,000
Total long-term liabilities $1,700,000 $1,500,000
Total liabilities $2,600,000 $2,380,000
Required:
Determine the following measures for 20Y2, rounding to one decimal place, except dollar amounts which should be rounded to the nearest cent. Assume 365 days a year.
Return on total assets %
Return on stockholders’ equity %
Return on common stockholders’ equity %

Answers

Answer 1.

Working Capital = Current Assets - Current Liabilities
Working Capital = $36,90,000 - $900000
Working Capital = $27,90,000

Answer 2.

Current Ratio = Current Assets / Current Liabilities
Current Ratio = $36,90,000 / $900000
Current Ratio = 4.1

7) Number days' sales in inventory = (Inventory/Cost of goods sold) * 365 days

=(11,90,000 / 53,50,000) * 365 days = 81.18 days approx

8) Ratio of fixed assets to long-term liabilities = Fixed Assets/Long Term Liabilities

=(2350000+3740000) / 1700000= 3.58 times

9) Ratio of liabilities to stockholders' equity = Total Liabilities/stockholders' equity

=26,00,000 / 71,80,000

=0.36211 times

10) Number of times interest charges are earned = Earnings Before Interest & Tax / Interest Expense

= 1300000 / 170000 = 7.64 times

11) Number of times preferred dividends are earned = Dividend on preferred stock/preferred stock

= 45000 / 500000

=0.09 times

12) Ratio of sales to assets = Net Sales (Total Sales-Sales Return)/Total Assets

= 10,000,000 / 9780000

= 1.022 times

13 ) Rate earned on total assets = Net Income/Average Total Assets(Opening+closing Total Assets)/2

=900000 /(8755000+ 97,80,000)/2

=900000/ 9267500

=0.09711 times or 9.711 %

14) Rate earned on stockholders' equity = Net Income/Average Stockholders' Equity(opening+closing stockholders' Equity)/2

=900,000/(6375000+7180000)/2

=900000/6777500

=0.132 or 13.27 %

15) Rate earned on common stockholders' equity=

(Net Income - Dividend on Preferred stock)/Average Common Stock(opening + closing common stockholders' equity)

=(900000-45000)/(500000+500000)/2

=855000/500000

=1.71 times

16. Earnings per share on common stock = (Net Income - Dividend on Preferred stock)/Common Stock(in numbers)

=(900000-45000)/100000

=8.55 times

17) Price-earnings ratio = Market Price per share/ Earnings per share

=119.70(given)/8.55

=14 times

18) Dividends per share of common stock = Dividend to common stock/common stock (in number)

=50000 / 100000

=0.5 times

19) Dividend yield = Dividends per share of common stock/Market Price per share

=(0.5 /119.70) * 100

= 0.835%

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In each diary kept by the owner/engineer's or contractor's personnel, entries should be made: A. to document every working day, whether any work is performed or not, or even if you did not go to the project site that day. B. only if something of particular importance is happening. C. regularly each time that you visit a site where work is being done; however, no entry need be made unless you were personally at the site and witnessed work being performed. D. A diary is neither necessary nor desirable on construction.

Answers

According to the construction management principle, in each diary kept by the owner/engineer's or contractor's personnel, entries should be made "to document every working day, whether any work is performed or not, or even if you did not go to the project site that day."

Purpose of Site Diary in Construction Management

A Site Diary in Construction management is a record book written to document the daily activity of the construction site.

A well-written site dairy is expected to show all the delivered or missing services and materials during the construction projects.

Hence, in this case, it is concluded that the correct answer is option A.

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You were recently hired by Scheuer Media Inc. to estimate its cost of capital. You obtained the following data: D1 = $1.75; P0 = $42.50; g = 7.00% (constant); and F = 5.00%. What is the cost of equity raised by selling new common stock?

Answers

The cost of equity raised by selling new common stock is 11.33%.

Using this formula

re = D1/(P0 × (1 - F)) + g

Where:

re=Cost of equity=?

Dividend(D1)=$1.75

Stock price(P0)=$42.50

Growth rate(g)=7.00%

Floatation cost (F)=5.00%

Let plug in the formula

re =1.75/(42.50 × (1 - 0.05)) + 0.07

re=1.75/(42.50×0.95)+0.07

re=(1.75/40.375)+0.07

re=0.04334365+0.07

re=0.1133×100

re=11.33%

Inconclusion the cost of equity raised by selling new common stock is 11.33%.

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