1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
drek231 [11]
3 years ago
15

Michael's, Inc. just paid $2.75 to its shareholders as the annual dividend. Simultaneously, the company announced that future di

vidends will be increasing by 5.90 percent. If you require a rate of return of 10.1 percent, how much are you willing to pay today to purchase one share of Michael's stock?
Business
1 answer:
yuradex [85]3 years ago
7 0

Answer:

$69.34

Explanation:

The computation of today one share of stock is shown below:

= (Next year dividend) ÷ (Required rate of return - growth rate)

where,

Next year dividend is

= $2.75 + $2.75 × 5.90%

= $2.75 + 0.16225

= $2.91225

And, the required rate of return is 10.1%

Plus, the growth rate is 5.90%

So, the today price is

= ($2.91225) ÷ (10.1% - 5.90%)

= ($2.91225) ÷ (4.2%)

= $69.34

You might be interested in
Patrick Rach International issued 5% bonds convertible into shares of the company's common stock. Rach applies U.S. GAAP. Upon i
Ludmilka [50]

Answer:

The correct answer is letter "B": The proceeds of the bond issue entirely as debt.

Explanation:

Under the U.S. General Accepted Accounting Principles (<em>GAAP</em>) the issuance costs of bonds are ignored for reporting purposes but the amount of sales revenues is recorded as debt. The amortization of the bond can be calculated using the <em>effective interest method</em> or the <em>straight-line method</em>.

6 0
3 years ago
This year, Linda Moore earned a $112,000 salary and $2,200 interest income from a jumbo Certificate of Deposit.She recognized a
olya-2409 [2.1K]

Answer:

a) salary $112,000

Interest income $2,200

Capital gain on stock -

gross income $114,200

capital gains and losses

capital gain 10,500

capital loss 15,300

Net capital loss = 4800

net loss offset on Gross income = 3000

Net Gross income $111,200

capital loss that is carried forward = $1800

b) salary $112,000

Interest income $2,200

Capital gain on stock -

gross income $114,200

CAPITAL LOSSES/GAINS

capital gain 16000

capital loss 15300

Net Capital gain = 700  

ADD taxable capital gains on Gross income

c) salary $112,000

Interest income $2,200

gross income $114,200

capital losses/ gains

capital loss 15300

capital loss 17000

Total Capital LOSS = $ 32300

Set off against income = (3000)

Losses carried forward =$29300

Explanation:

Capital losses can be offset on normal Gross income but only up to $3000 per year

6 0
3 years ago
George works in an office where smoking is allowed. George develops lung cancer and sues his company, Lennie L.L.C., for hazardo
IRINA_888 [86]
I believe the answer is: Civil court

Civil court is the place where the justice department handle all cases that does not involve the infringement of the criminal laws.
The cases that come into this court would revolve around conflict between two legal citizens or organizations, such as conflict between employees and their workers, conflict between divorced couples, conflict between rent owners and tenants, etc.
5 0
3 years ago
Read 2 more answers
Which of the following is not a type of bank?
Andre45 [30]
Payday lender, I believe
5 0
3 years ago
Under a periodic inventory system:____________.
anyanavicka [17]

Answer:

1. accounting records continuously disclose the amount of inventory.

Explanation:

The periodic inventory system is the accounting method of calculating the value of inventory at the end of a specified period of time. Under this system, updates are made on a periodic basis rather than after every sale or purchase of inventory. It continuously tracks the record of inventory by physically counting the inventory and the cost of inventory is calculated by using the inventory calculation method, such as FIFO, LIFO, and weighted averages.

7 0
3 years ago
Other questions:
  • "everything else held? constant, if the expected return on u.s. treasury bonds falls from 8 to 7 percent and the expected return
    6·1 answer
  • Paul borrowed $90 from greg eight months ago. today, paul paid greg back $102.60. what is the simple annual interest rate that p
    7·1 answer
  • Which of the following statements about renting and owning is correct
    9·2 answers
  • The concept or principle that states that companies should recognize revenue when goods or services are transferred to customers
    7·1 answer
  • Galaxy Products is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under P
    15·1 answer
  • Court Casuals has the following beginning balances in its stockholders' equity accounts on January 1, 2021: Common Stock, $110,0
    8·1 answer
  • Right Medical introduced a new implant that carries a five-year warranty against manufacturer’s defects. Based on industry exper
    10·2 answers
  • A company purchased a computer system on January 2, 2018 for $1,600,000. The company used the straight-line depreciation method
    15·1 answer
  • Pecan Theatre Inc. owns and operates movie theaters throughout Florida and Georgia. Pecan Theatre has declared the following ann
    10·1 answer
  • The__________is based on a set of cause-and-effect linkages between internal and external performance, and in this fashion, defi
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!