Investors have invested $25,000 in common equity in a company. Given the risk inherent in the company, the investors expect to earn a 15 percent return. In addition, the investors expect the company to return all income to investors in the form of dividends. The company earns $4,000 the first year. For this company determine the following:
a. The companys srequired earnings
b. The company'sre sichal earnings

Question

Investors have invested $25,000 in common equity in a company. Given the risk inherent in the company, the investors expect to earn a 15 percent return. In addition, the investors expect the company to return all income to investors in the form of dividends. The company earns $4,000 the first year. For this company determine the following:
 a. The companys srequired earnings
b. The company'sre sichal earnings

Quizplus · Accepted Answer

The Answer of Investors have invested $25,000 in common equity in a company. Given the risk inherent in the company, the investors expect to earn a 15 percent return. In addition, the investors expect the company to return all income to investors in the form of dividends. The company earns $4,000 the first year. For this company determine the following:
 a. The companys srequired earnings
b. The company'sre sichal earnings

Investors Have Invested $25,000 in Common Equity in a Company