Homework Answers
Q7) B) $9.67
explanation: value = annual dividend / discount rate
= 1.45 / 0.15
= 9.67
Q8) $1,103.10
Explanation: Debt / equity = 0.55
Total capital = debt + equity
= 0.55 + 1
= 1.55
Weight of equity = equity / total capital
= 1 / 1.55
= 0.64516
Assets = liabilities + equity
8,999 = liabilities + equity
Equity = 8,999 × 0.64516
= 5,805.79484
Return on equity = net income / equity
19% = net income / 5,805.79484
Net income = 0.19 × 5,805.79484
= $1,103.10
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