Making the business riskier contributes to a higher weighted average cost of capital Intelligence Corp. (IC) pays an annual dividend of $2.00 per share. IC announced it will start to grow the dividend by 15% per year from now on. If IC's shareholders require a 20% return on common shares, what should one share of IC stock sell for? A) $10.00 B) $15.33 C) $40.00 D) $46.00 October 23, 201 D) UUES Bonds 59. Energrowth Industries Ltd. has 3.3 million con stries Ltd. has 3.3 million common shares outstanding with a current market price of $25.50. Now, as in the future, the annual dividend is expect $2.50. What is the cost of share capital to the business? ne annual dividend is expected to be A) 2.0% B) 9.8% C) 14.5% D) 25% 60. bowden Building Supply reported an EBIT of $5,531,500, has a 35% tax rate, pays interest of $480,000 on $9.290,000 of debt and $0.60 to each of its 500,000 common shares outstanding. What is the company experiencing? A) B) C) No presence of financial leverage as indicated by a ratio of 0.6 No presence of financial leverage as indicated by a ratio of 1.0 The presence of financial leverage as indicated by a ratio of 1.1 The presence of financial leverage as indicated by a ratio of 1.8 61. Which of the following is a disadvantage to a business of using debt to finance its projects? A) It contributes to the dilution of management control -- 343.0 82.1 D) 72.8 69. What is the Economic Order Quantity (EOQ)? A) e amount that should be ordered to minimize the cost of holding the inventory and the cost of ordering The period of time between orders in days, months and/or quarters, to reduce the inventory holding and ordering costs The total inventory cost considering the value of the purchase, order costs, warehousing costs and labour costs The cost of an individual order considering the value of the purchase, order costs, warehousing costs and labour costs 70. If a company faces a 60-day lead time on orders of a European faucet with an annual demand of 2,190 units, at what inventory level must it reorder to ensure sufficient supply to satisfy average demand? A) 60 B) 360 C) 6 D) 45 Magdalene Pottery and Gifts has annual sales revenue of $1,596,875, of which 80% are on credit, and accounts receivable of $143,500. What is the company's average collection period for receivables in days? D) 12 41 C) 33 B) A) 9 What is the risk in using a bank overdraft as a source of financing? at the credit rating of the company