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Kisachek [45]
3 years ago
14

Perine, Inc., has balance sheet equity of $6 million. At the same time, the income statement shows net income of $906,000. The c

ompany paid dividends of $480,180 and has 200,000 shares of stock outstanding. If the benchmark PE ratio is 24, what is the target stock price in one year? Assume the firm will grow at the sustainable growth rate. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Oksanka [162]3 years ago
5 0

Answer:

The target stock price in year 1 is $51.12

Explanation:

Given SE = $6 MIL, NI= $906 000, Div= $408180, Shares= 200000, PE ratio= 24 , SP =?

W e will use the price earning ratio as we are are given the benchmark PE ratio and this ratio measures the stock price relative to it profits

PE = Stock price / Earnings per share

Need to calculate Earnings per share

EPS = net Income - dividends/ oustanding Shares

       =906000-480180/200000

         =$2.1291/$2.13

Sustitute in the formula for PE ratio

24 = Stock Price/2.13

Stock Price = $51.12

Therefore the target stock price in year 1 is $51.12

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Logos is the right answer


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Mint Co.'s cash balance in its balance sheet is $1,300,000, of which $300,000 is identified as a compensating balance. Additiona
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Answer:

Correct option is B Yes and Yes

Yes - Compensating shall be reported, And Restricted shall also be reported.

Explanation:

Compensating balance is the minimum balance to be maintained in the company's bank account as this is used by bank for offsetting loan, and used by company to set up the loan amount.

Restricted balance is a choice made by the company to not use the funds and use it later for company's growth or future projected, but still since it cannot be used it shall also be reported accordingly.

Therefore the company has the need to report such restricted balance also and compensating balance has to be reported as well.

Therefore correct option is B

Yes - Compensating shall be reported, And Restricted shall also be reported.

7 0
3 years ago
Assume that a consumer purchases only two products. Suppose that the consumer's money income doubles, and the prices of the two
Vitek1552 [10]

Answer:

c

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A) A shift of the budget line inward to the left

B) A shift of the budget line outward to the right

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5 0
3 years ago
Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $1,900,000. Hard
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Answer:

B. 950,000

Explanation:

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<h3>What is Customer satisfaction?</h3>

Customer Satisfaction refers to the fulfillment of the needs and the desire of the customer by making the product as per there requirement. It is the measurement of the how much the customer is satisfied with the product.

In the above case, the State Farm provides the services to the customer by selling the metal sheets. They had promised the customer for providing the original equipment manufactured to be replaced with the new till the life span of the metal sheets.

Thus the correct option is 2nd.

Learn more about the Customer satisfaction here:

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3 0
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