Suppose Stark Ltd. just issued a dividend of $1.59 per share on its common stock. The company paid dividends of $1.25, $1.33, $1.40, and $1.51 per share in the last four years. a. If the stock currently sells for $40, what is your best estimate of the company’s cost of equity capital using the arithmetic average growth rate in dividends? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.) a. What if you use the geometric average growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g., 32.16.)

Vulcan flyovers offers scenic overflights of mount st. helens, the volcano in washington state that explosively erupted in 1982. data concerning the company’s operations in july appear below: vulcan flyovers operating data for the month ended july 31 actual results flexible budget planning budget flights (q) 56 56 54 revenue ($350.00q) $ 16,500 $ 19,600 $ 18,900 expenses: wages and salaries ($3,300 + $91.00q) 8,354 8,396 8,214 fuel ($31.00q) 1,904 1,736 1,674 airport fees ($870 + $35.00q) 2,730 2,830 2,760 aircraft depreciation ($11.00q) 616 616 594 office expenses ($240 + $1.00q) 464 296 294 total expense 14,068 13,874 13,536 net operating income $ 2,432 $ 5,726 $ 5,364 the company measures its activity in terms of flights. customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount. required: 1. prepare a flexible budget performance report for july that includes revenue and spending variances and activity variances.