Answer:
The current share price is $71.05
Explanation:
P3 = D3(1 + g)/(R – g)
= D0[(1 + g1)^3](1 + g2)/(R – g)
= [$1.45*(1.20)^3(1.08)]/(0.11 – 0.08)
= $90.20
The price of the stock today is the PV of the first three dividends, plus the PV of the Year 3 stock price given by:
P0 = $1.45(1.20)/1.11 + $1.45[(1.20)^2]/1.112 + $1.45[(1.20)^3]/1.113 + $90.20/1.113
= 1.568 + 1.695 + 1.832 + 65.958
= $71.05
Therefore, The current share price is $71.05
Answer:
Overhead costs are often affected by many issues and are frequently too complex to be explained by any one factor.
Explanation:
An overhead cost is not directly defined, to be that of material, or labor, or any other unit, overhead include, many factors, electricity usage, machine hours usage, water usage, or the capacity utilization of machinery, and various other factors. Since its computation and allocation is not clear many a times, a single overhead like that of electricity, has many factors, ideal usage of electricity, or machine hours used in production or simply the total cost of overheads for that month or building or etc: and its utilization. In short, to conclude we can state that overhead costs are complex in nature.
All other options are false.
Final Answer
Overhead costs are often affected by many issues and are frequently too complex to be explained by any one factor.
Answer:
The increase in operating profit is $1,829.00.
Explanation:
The rise or fall in the operating income:
= Purchase unit × ( offer price- direct material- direct labor- variable overhead)
The rise or fall in the operating income: = 1550× (2 - 0.26 - 0.4 - 0.16)
The rise or fall in the operating income: = $1829
Therefore the profit will increase by $1829
Here all the fixed cost is not considered because it is a sunk cost and variable and administrative expenses are also not considered because these costs are not going to be incurred for offer.
Answer:
The income elasticity of demand for dog biscuits is Option D: positive, and dog biscuits are a normal good.
Explanation:
'Income elasticity of demand' refers to the reaction of the demand in quantity for a good or service to that of change in income.
'Normal goods' are the goods that are related positively with income whereas 'inferior goods' are those goods which are related negatively with income. As the income increases, there is a rise in demand for the dog biscuits. This means the dog biscuits are normal goods. Income elasticity for demand is positive for Danita as it is because of the rise in income. Hence, Option D is the most appropriate.
