Answer:
Net increase in operating income = $1,200
Explanation:
Contribution margin per unit = $150 - $75 = $75 per unit
if marketing expenses increase by $6,300, the total number of units sold will incerase by 100 units. Differential increase in contribution margin = $75 x 100 = $7,500. Differential increase in fixed expenses = $6,300. Net increase in operating income = $7,500 - $6,300 = $1,200
Answer:
a. Dividend growth rate = 9%
b. $40
c. If Price is reduced then Earning per share will also decrease.
Explanation:
a. The computation of Growth rate is shown below:-
Share price = Expected dividend ÷ (Cost of equity - Dividend growth rate)
$80 = $4 ÷ (0.14 - Dividend growth rate)
11.20 - 80 × Dividend growth rate = 4
Dividend growth rate = 9%
b-1 The computation of Price is shown below:-
= Expected dividend ÷ (Cost of equity - Revised downward percentage)
= 4 ÷ (0.14 - 0.04)
= 4 ÷ 0.10
= $40
b-2 If Price is reduced then Earning per share will also decrease.
Answer:
$21,000
Explanation:
During the year, credit sales amounted to $ 840,000.
Cash collected on credit sales amounted to $ 790,000, and $ 18,000 has been written off.
At the end of the year, the company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%.
The amount of bad debts expense for 2019 is 2.5% x 840,000 = $21,000
He made $115 because 25% of 40 is 10. multiply 10 by 4 rings to get 40. 25% of 60 is 15. multiply 15 by 5 to get 75. add 40 to the 75 to get $115.
Answer:
a)
$50 = $2 / (16% - g)
16% - g = $2 / $50 = 4%
g = 16% - 4% = 12%
expected growth rate = 12%
b)
P₀ = $2 / (16% - 5%)
P₀ = $2 / 11%
P₀ = $18.18
c)
P/E ratio = share price / EPS
since the share price decreases from $50 to $18.18, the P/E ratio will decrease. When you are dividing a number, if the numerator decreases while the denominator remains still, the answer will decrease.
