Answer:
The amount of $25,000 will be recorded as the Cash Dividends
Explanation:
The amount which is to be recorded as the cash dividend is computed as:
Cash Dividend = Number of Shares × Rate per share
where
Number of shares is computed as:
Number of shares = Issued Shares - Treasury Stock
= 30,000 - 5,000
= 25,000
NOTE: No dividend is paid on treasury stocks, so the the shares of the treasury stocks are subtracted.
Rate per share is $1
SO, Putting the values above:
Cash Dividend = 25,000 × $1
= $25,000
Answer:
- $25.50
- 90,000 units
- 140,000 units
Explanation:
1. Current contribution margin ratio
= (Selling price - Variable cost)/ Selling price
= (25 - 19.8) / 25
= 0.208
New Direct labor = 5.0 * ( 1 + 8%)
= $5.40
New variable cost = 19.8 + 0.4 = $20.20
To maintain 0.208
0.208 = (Selling price - 20.20) / Selling price
0.208 * Price = Price - 20.20
0.208Price - Price = -20.20
-0.792Price = -20.20
Price = -20.20/-0.792
Price = $25.50
2. Breakeven = Fixed Cost / Contribution Margin
Contribution Margin = Selling price - Variable cost
= 25 - 19.8
= $5.20
= 468,000/5.2
= 90,000 units
3. To earn $260,000;
= (Fixed Cost + 260,000) / Contribution margin
= (468,000 + 260,000) /5.2
= 140,000 units
Answer:
Management can implement a tax strategy to create future taxable income, but it will be detrimental to the future profitability of the company.- D.
Answer:
The price of the stock today is $42.94
Explanation:
The price of a stock whose dividends are expected to grow at a constant rate is calculated using the constant growth model of Dividend Discount model approach. It bases the price of the stock on the present value of the expected future dividends. The price today under this model is calculated as follows,
P0 = D0 * (1+g) / r - g
Where,
- D0 * (1+g) is the D1 or the dividend for the next year
- r is the required rate of return
- g is the growth rate in dividends
P0 = 4 * (1+0.052) / (0.15 - 0.052)
P0 = $42.938 rounded off to $42.94
