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aleksley [76]
1 year ago
5

Newtech corporation is offering a 10% stock dividend. The firm currently has 200,000 shares outstanding and after-tax profits of

$800,000. The current price of the stock is $48. What will be the stock price after the stock dividend?.
Business
1 answer:
White raven [17]1 year ago
5 0

The stock price after the stock dividend =  $3636

<h3>What is Stock dividend?</h3>

A common stock dividend is a payment made from a company's profits to holders of common stock. The payout is made in the form of stock or cash, much like regular dividends. The amount of the common stock dividend may be regulated by law, especially if it is paid as a cash distribution that is effectively a liquidation.

<h3>What is shares outstanding?</h3>

All of the shares of a corporation that have been approved, issued, and purchased by investors and are now owned by them are referred to as outstanding shares. They differ from treasury shares, which are stock held by the corporation itself and have no rights that can be exercised.

<h3>According to the given information:</h3>

There are 200,000 shares in circulation.

Profits after taxes amount to $800,000.

$48 is the current stock price.

Stock dividend equals 10%

number of shares outstanding following a stock dividend

=200,000*(1+10%)

=220,000

earnings per share following stock dividends

=$800,000/220,000

=$3.636

As a result, $3.636 worth of earnings per share remain after the stock dividend.

To know more about Stock dividend visit:

brainly.com/question/13049947

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iVinArrow [24]

<u>A small risk of loss in an investment:</u>

Investment risk can be characterized as the likelihood or probability of the event of misfortunes comparative with the normal profit for a specific venture. Portrayal: Stating basically, it is a proportion of the degree of vulnerability of accomplishing the profits according to the desires for the financial specialist.

The potential advantage of a "high-chance venture" is that quite possibly you could make an extremely exceptional yield on the speculation too. The five measures incorporate the alpha, beta, R-squared, standard deviation, and Sharpe proportion. Hazard measures can be utilized separately or together to play out a hazard appraisal.

7 0
3 years ago
During june, vixen company sells $850,000 in merchandise that has a one year warranty. experience shows that warranty expenses a
Musya8 [376]

Answer:

Explanation:

The journal entry is shown below:

Warranty expense A/c Dr $25,500

        To Estimated warranty liability $25,500

(Being the estimated warranty provision is recorded)

The computation is shown below:

= Merchandise sale value × given percentage

= $850,000 × 3%

= $25,500

Simply we debited the warranty expense and credited the estimated warranty liability so that the correct posting can be done.

4 0
3 years ago
Consider two scenarios for a nation's economic growth. Scenario A has real GDP growing at an average annual rate of 3.5 percent;
WARRIOR [948]

Answer:

20 years (scenario A) and 16 years (scenario B)

Explanation:

The real GDP will double in "n" number of years, with "n" estimated by interpolation using the formula below.

current GDP * (1+Growth Rate)^{n} = 2 * current GDP

In the solutions below, we assumed current GDP to be 1, and as a result, the GDP will double to 2.

Scenario A

1 * (1+0.35)^{n} =2

When you substitute 20 for "n" in the left hand side (LHS) of the equation, you will arrive at 1.99 which is approximately equal to 2. Any number below 20 will result in a number less than 2.

Thus, with an average annual real GDP growth rate of 3.5%, real GDP will double in about 20 years.

Scenario B

1 * (1+0.45)^{n} =2

When you substitute 16 for "n" in the left hand side (LHS) of the equation, you will arrive at 2.02 which is approximately equal to 2. Any number below 16 will result in a number less than 2.

Thus, with an average annual real GDP growth rate of 4.5%, real GDP will double in about 16 years.

6 0
3 years ago
d needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. w
Phoenix [80]

The kind of policy is needed Level term.

With limited payment life insurance, the policyholder refrains from extending the policy to ultimately pay the premium. Instead, you pay the full cost of the policy over time. Term life insurance, also known as pure life insurance, is a type of death benefit that is paid to the policyholder's heirs over a specified period of time.

Life provides whole-life protection at a premium for 30 years. The advantage of this policy is that premiums can be carried forward for 30 years, making life insurance cheaper compared to other limited payment options. Single premium life insurance allows policyholders to make a lump sum payment instead of monthly, quarterly, or yearly payments.

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6 0
1 year ago
The S&amp;P 500 Index is one of the most commonly used benchmark indices for the U.S. equity markets. Consisting of 500 companie
seropon [69]

Answer:

1. Based on my understanding of P/E ratios, in which of the following situations would the average trailing P/E ratio (current price divided by earnings per share over the previous 12 months) of the S&P 500 Index be higher?

Th e correct option is (<em>b). The outlook for the economy and the markets is for improvement. </em>

2. You invest $100,000 in 40 stocks, 20 bonds, and a certificate of deposit (CD). What kind of risk will you primarily be exposed to?  

Th e correct option is <em>(b). Portfolio risk   </em>

3. Generally, investors would prefer to invest in assets that have:  

a. A higher-than-average expected rate of return given the perceived risk

Explanation:

1. Based on my understanding of P/E ratios, in which of the following situations would the average trailing P/E ratio (current price divided by earnings per share over the previous 12 months) of the S&P 500 Index be higher?

Th e correct option is (<em>b). The outlook for the economy and the markets is for improvement. If the outlook of the economy and the market prospects of the stocks are for improvements, it then means that the Price Per Earning of the stock will be increasing, which is a positive economic trend.</em>

<em>Moreover, since we are talking about the average P/E it can be inferred that in the very long run, average of the S&P 500 Price to Earnings (PE) ratio (since 1900) is approximately 15.8, and the ratio since 1946 (the post-World War II period) is 17.3, so, it is fair to call a "normal" PE ratio about 16.5, which is relatively stable over the years. </em>

 2. You invest $100,000 in 40 stocks, 20 bonds, and a certificate of deposit (CD). What kind of risk will you primarily be exposed to?  

Th e correct option is <em>(b). Portfolio risk  is the chance that the combination of assets or units, within the investments that you own, fail to meet financial objectives. Each investment within a portfolio carries its own risk, with higher potential return typically meaning higher risk. It can be computed as  the risk of the  two-securities portfolio, first take the square of the weight of  40 Stocks ($100,000.00)  and multiply it by square of standard deviation of  the 40 stocks. Repeat the calculation for 20 Bonds and a Certificate of Deposit.</em>

<em></em>

3. Generally, investors would prefer to invest in assets that have:  

a. A higher-than-average expected rate of return given the perceived risk <em>Yes they will because a higher -than average expected rate of return will inform the investor the type of strategies to adopt to guarantee the expected earnings containing the risk. </em>

<em></em>

5 0
3 years ago
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