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2 years ago

The two-stage dividend growth model evaluates the current price of a stock based on the assumption a stock will:_____.

1 answer:

4 0

The two-stage dividend growth model assesses a stock's present price based on the presumption that it will increase in value at a different rate eternally after growing at a fixed rate for a set period of time.

The payout increases steadily in the first phase for a predetermined period of time. In the second, it is presumable that the dividend will increase at a different pace for the rest of the company's existence.

A mathematical technique called the dividend growth model allows investors to determine a realistic fair value for a company's stock based on its current dividend payout and projected dividend growth in the future.

Learn more about two-stage dividend growth model here.

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Suppose gold (G) and silver (S) are substitutes for each other because both serve as hedges against inflation. Suppose also th

maksim [4K]

Answer:

a) Gold = $1,380; Silver = $1,020

b) Gold = $1,300; Silver = $980

Explanation:

a) At first, with Qg = 60 and Qs = 270, the equilibrium prices for gold and silver are found by solving the following linear system:

$P_g = 930-60 +0.50 P_s\\P_s = 600 - 270 + 0.50P_g\\\\-P_s=1740 -2P_g\\P_s = 330+ 0.50P_g\\P_g = 1,380\\P_s = 1,020$

Equilibrium price of gold is $1,380 and the price of silver is $1,020.

b) If the supply of gold increases to 120, since the goods are substitutes, there will be an increase in overall supply and the equilibrium price of gold and silver will decrease as follows:

$P_g = 930-120 +0.50 P_s\\P_s = 600 - 270 + 0.50P_g\\\\-P_s=1620 -2P_g\\P_s = 330+ 0.50P_g\\P_g = 1,300\\P_s = 980$

Equilibrium price of gold is $1,300 and the price of silver is $980.

8 0

3 years ago

Suppose the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 unit

HACTEHA [7]

Answer:

The government sets pollution standards using regulations

Explanation:

For the government of a country to effectively reduce pollution by industries present in it's nation, pollution standards needs to be put in place with the use of laws/regulations backing them.

For example in the question, the government can make set a pollution standard that the industry must not go beyond 6 units of pollution otherwise a fine would be charged for defaulting. This would persuade the industry to reduce their pollution rate.

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3 years ago

Bushard Company (buyer) and Schmidt, Inc. (seller) engaged in the following transactions during February 2019:

Allisa [31]

Answer:

Bushard Company (buyer) and Schmidt, Inc. (seller)

Journal Entries:

Bushard Company

Feb. 10 Debit Inventory $5,000

Credit Accounts payable (Schmidt, Inc.) $5,000

To record the purchase of goods on account, via Invoice 1980, terms 1/10, n/30.

13 Debit Accounts payable (Schmidt, Inc.) $200

Credit Inventory $200

To record the return of damaged goods and received Credit Memorandum 230.

19 Debit Accounts payable (Schmidt, Inc.) $4,800

Credit Cash $4,752

Credit Cash Discounts $48

To record the payment on account and discounts.

Schmidt, Inc.

Feb. 10 Debit Accounts receivable (Bushard Company) $5,000

Credit Sales revenue $5,000

To record the sale of goods on account, Invoice 1980, terms 1/10, n/30.

13 Debit Sales returns $200

Credit Accounts receivable (Bushard Company) $200

To record the return of damaged, issuing Credit Memorandum 230.

19 Debit Cash $4,752

Debit Cash Discounts $48

Credit Accounts receivable (Bushard Company) $4,800

To record the receipt of cash from customer, including discounts.

Explanation:

a) Data and Analysis:

Bushard Company

Feb. 10 Inventory $5,000 Accounts payable (Schmidt, Inc.) $5,000, Invoice 1980, terms 1/10, n/30.

13 Accounts payable (Schmidt, Inc.) $200 Inventory $200 Credit Memorandum 230, damaged merchandise.

19 Accounts payable (Schmidt, Inc.) $4,800 Cash $4,752 Cash Discounts $48

Schmidt, Inc.

Feb. 10 Accounts receivable (Bushard Company) $5,000 Sales revenue $5,000, Invoice 1980, terms 1/10, n/30.

13 Sales returns $200 Accounts receivable (Bushard Company) $200 Credit Memorandum 230, damaged merchandise.

19 Cash $4,752 Cash Discounts $48 Accounts receivable (Bushard Company) $4,800

7 0

3 years ago

Marla is a buyer at a major corporation. Although she is authorized to make purchasing decisions on her own, she often seeks the

stiv31 [10]

Answer:

Consultative

Explanation:

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3 years ago

Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common

Oksi-84 [34.3K]

Answer and Explanation:

The journal entries are shown below:

On March 1

Cash Dr (55,000 × $52) $2,860,000

To Common stock (55,000 × $1 per share) $55,000

To Additional paid in capital - common stock $2,805,000

(Bein the issuance of the common shares are recorded)

On May 10

Treasury stock Dr (5,000 shares × $55) $275,000

To Cash $275,000

(being the purchase of treasury stock)

On June 1

Dividend Dr (150,000 shares × $1.50) $225,000

To Dividend payable $225,000

(Being the cash dividend is declared)

On July 1

Dividend payable Dr (150,000 shares × $1.50) $225,000

To cash $225,000

(being the dividend paid is recorded)

On October 21

Cash Dr (2,500 shares × $60) $150,000

To Treasury stock (2,500 shares × $55) $137,500

To Additional paid in capital - treasury stock $12,500

(Being the reissuance of the treasury stock is recorded)

3 0

3 years ago