Case 5.1 Disaster and Consumer Value

g . Kings Donut Inc common stock sells for $39.86 a share at a market rate of return of 9.5%. The company just paid its annual d

Simora [160]

6.29% is the rate of growth

Explanation:

The following formula is used

Price = D1 / ke -g

39.86 = 1.2 multiply with (1 + g) / 0.095 - g

3.7867 – 39.86 g = 1.2 + 1.2 g

2.5867 = 41.06 g

Now, we have to calculate the value of g

g = 2.5867 divide 41.06

= 0.0629

= 6.29 %

Where:

G = growth, ke = market rate of return, D1 = dividend ( annual), P = price of the share of company

7 0

2 years ago

Which of the following goods is nonrival?

arsen [322]

A tuna in the ocean

6 0

2 years ago

Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current year, Biscayne Bay Water Inc. reacquired

nordsb [41]

Answer:

treasury stock 1,645,600 debit

cash 1,645,600 credit

--to record he purchase of TS--

cash 925,000 debit

treasury stock 850,000 debit

additional paid-in TS 75,000 debit

-to record sale of TS above their cost--

cash 760,500 debit

additional paid-in TS 35,100 debit

Treasury Stock 795,600 credit

Explanation:

treasury stock cost:

24,200 shares x $68 each = 1,645,600

sale of TS

proceeds: 12,500 x $74 =925,000

cost: 12,500 x $68 = 850,000

additional paid-in TS 75,000

second sale of TS:

proceeds _ 11,700 x $65 760,500

Cost: 11,700 x $68 795,600

additional paid-in TS 35,100

6 0

2 years ago

Jarvey Corporation is studying a project that would have a ten-year life and would require a $450,000 investment in equipment wh

Nastasia [14]

Answer:

3 years

Explanation:

Since the income tax is ignored, so the operating cash flows would be

= EBIT + Depreciation - Income tax expense

= $105,000 + $45,000 - $0

= $150,000

The operating cash flows are same for ten years

And, the initial investment is $450,000

So, the payback period would be

= Initial investment ÷ Net cash flows

= $450,000 ÷ $150,000

= 3 years

6 0

3 years ago

Josephine is a teenager who works part-time to make money to pay for the upkeep of her car, gasoline, and car insurance. she als

tino4ka555 [31]

Answer:

The correct answer is: in retail.

Explanation:

To begin with, if Josephine is a teenager who works part-time to make money for her own expenses and also she is like most of american youth who hold part-time jobs then the most probable place to work is in retail, where many teenagers are required due to the fact that the majority of the jobs given in that area are for people who do not need many skills or abilities and therefore that the common action to take is to hire young people to pay low salaries for part-time jobs.

5 0

3 years ago

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