Answer:
Intrinsic value of the stock is = $10
Explanation:
<em>The value of a stock is the present value of the expected dividends discounted at the required rate of return.</em>
We can determine the intrinsic value of a stock using the steps below:
Step 1
<em>Calculate the cost of equity using the capital asset pricing model (CAPM)</em>
E(r)= Rf +β(Rm-Rf)
E(r) =? , Rf- 4%, Rm- 13%, β- 4
E(r) = 4%+ 4× (13- 4)%
= 40%
Step 2
<em>Calculate the value of stock</em>
Price of stock = D(1+g)/(r-g)
r- 40%, g- 10%, D(1+g)- 3 (dividend payable in year 1)
Value of stock = 3/(0.4-0.1)
= $10
Intrinsic value of the stock is = $10
The private sector has sometimes been forced to change accounting standards because the <u>A) SEC </u>did not agree with a particular standard issued by the private sector.
<h3>Who is authorized to set accounting standards for companies?</h3>
The Securities and Exchange Commission (SEC) owns the authority to set accounting standards for companies.
The SEC has delegated this task to the private sector, represented by the Financial Accounting Standards Board (FASB), which is now the authoritative source of U.S. Generally Accepted Accounting Principles (GAAP).
The FASB is an independent non-profit organization that sets accounting and financial reporting standards for the private sector.
The SEC continues to release rules and interpretations on accounting standards.
Thus, if the SEC does not agree with a particular standard issued by the private sector, it can force a change.
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Answer:
June 1, 2022
Cash 262650 Dr
Bonds Payable 255000 Cr
Premium on bonds payable 7650 Cr
Explanation:
As the bonds with a face value of $255000 are issued at 103%, this means that they are being issued at a premium of 3 percent. The premium on bonds payable will be,
Premium on bonds payable = 255000 * 0.03 = 7650
We will debit the cash received from issuing the bonds that is face value of the bond plus premium. The cash receipt will be = 255000 + 7650 = 262650
The journal entry will be to be to debit cash and credit bonds payable and premium on bonds payable
This illustrates job specialization. Job specialization is process by which people, or employees, develop specialized knowledge and abilities to carry out particular tasks. It entails preparing the individual to excel in a specified set of duties.
Job specialization differs from work specialization, a leadership strategy in which an employer teaches workers to take on challenging tasks by breaking them down into smaller, manageable chunks. Job specialization has advantage of lowering your risk of error. An improvement in staff morale is benefit of job specialization.
Being extremely skilled at a particular task function is perhaps most obvious benefit of job specialization.
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