Answer:
A) $9,100, $9,100
Explanation:
Calculation for the net realizable value of the receivables before
Accounts receivable $9,500
Less Allowance for doubtful accounts 400
Net realizable value of the receivables BEFORE $9,100
Calculation net realizable value of the receivables after the write-off
Accounts receivable $9,500
Less Allowance for doubtful accounts 400
Net realizable value of the receivables AFTER $9,100
Therefore The net realizable value of the receivables before and after the write-off was
$9,100, $9,100
Answer: Option b
Explanation: Perfect competition refers to a market structure in which there are large number of small sellers selling identical products in the market. Due to large number of participants no individual firm is able to affect prices on the basis of their operations.
It is not possible earn abnormal profits in such a market structure.
Hence from the above we can conclude that the correct option is B.
Answer:
Book value is a key measure that investors use to gauge a stock's valuation. The book value of a company is the total value of the company's assets, minus the company's outstanding liabilities.
Explanation:
Answer: Required return = 15%
Explanation:
Current Price using the constant-growth DDM is;
Current Price = Expected dividend / ( Required return - growth rate)
This can therefore be used to calculate the required return.
Growth rate = Return on Equity * Retention ratio
= 15% * ( 1 - payout ratio )
= 15% * (1 - 40%)
= 15% * 60%
= 9%
Expected dividend = Earnings per share * Payout ratio
= 3 * 40%
= $1.20
Using the formula;
Current Price = Expected dividend / ( Required return - growth rate)
20 = 1.20 / (Required return - 9%)
20 * (Required return - 9%) = 1.20
Required return - 9% = 1.20 / 20
Required return = (1.20 / 20) + 9%
Required return = 15%
