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
ohaa [14]
3 years ago
13

Justin Cement Company has had the following pattern of earnings per share over the last five years: Year Earnings Per Share 20X1

$ 8.00 20X2 8.40 20X3 8.82 20X4 9.26 20X5 9.72 The earnings per share have grown at a constant rate (on a rounded basis) and will continue to do so in the future. Dividends represent 40 percent of earnings. a. Project earnings and dividends for the next year (20X6). (Round the growth rate to the nearest whole percent. Do not round any other intermediate calculations. Round your answers to 2 decimal places.)b. If the required rate of return (Ke) is 13 percent, what is the anticipated stock price (P0) at the beginning of 20X6? (Round the growth rate to the nearest whole percent. Do not round any other intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
ElenaW [278]3 years ago
8 0

Answer:

(a) $4.08

(b) $51.03

Explanation:

Constant growth rate for earnings:

= (EPS for any year ÷ EPS for the previous year) - 1

= (8.40 ÷ 8.00) - 1

= 0.05

= 5%

(a) EPS for 2016 = EPS for 2015 × (1 + 5%)

                          = 9.72 × 1.05

                          = $10.21          

Dividend for 2016 = 40% × EPS for 2016

                               = 40% × 10.206

                               = $4.08

(b) Stock Price at the beginning of 2016:

= Dividend for 2016 ÷ (Required rate of return - Constant growth rate)

= 4.0824 ÷ (0.13 - 0.05)

= $51.03

You might be interested in
Do the results of the experiment support the camouflage hypothesis? do the results of the experiment support the camouflage hypo
Bond [772]

I guess the last option is the best answer.

Yes; mouse models with camouflage coloration were preyed on less often than non-camouflaged mouse models.

3 0
3 years ago
Maggie’s mom agrees to let Maggie buy small gifts for some of her friends. Each gift costs $4. Maggie’s mom gave her a budget of
solmaris [256]

Maggie can buy 3 gifts

Solution:

Total budget $19

Each gift costs $4

Shipping fee $7

a.  Total budget — Shipping fee = $19 - $7 = $12  

Maggie’s got $12 more

Each gift costs $4  

Number of gifts that Maggie can buy = \frac{12}{4}  =3  

b.   Let x represent the number of gifts.  

                      19 = 7 +4x

       Subtract -7 from both sides

             19 - 7= 7 + 4x - 7

            Now Simplify,

                   12 = 4x

         Divide both sides by 4

                   \frac{12}{4} = \frac{4x}{4}

                      x = 3  

5 0
3 years ago
Which of the following is NOT a supertrend affecting the future of business? Multiple Choice Offshore suppliers are changing the
Yakvenalex [24]

Answer:

A multiple choice offshore suppliers are changing the way work

6 0
3 years ago
Lavallee Self Storage purchased​ land, paying $ 160 comma 000 cash as a down payment and signing a $ 145 comma 000 note payable
Andrews [41]

Answer:

Land 373,500

Building 1,100,000

<u />

land improvements   67,000

Fence         55,000

Sign            12,000

Explanation:

Land cost:

cash                               160,000

note payable                   145,000

delinquent property tax     4,000

insurance costing                1,500

level the land                      3,000

soil                                <u>    60,000</u>

Total land:                      373,500

The land will be recorded for all the cost necessary to get it ready for use.

The soil, once added can't be differentiate from the original land. It is added to the land is not an improvement.

The office building will be for 1,100,000

land improvements will be the fence and signs:

fence 55,000

sign  <u>  12,000  </u>

total   67,000

3 0
3 years ago
For a perfectly competitive firm, which of the following is not true at profit maximization?a. Total revenue minus total cost is
topjm [15]

Answer: Option (d) is correct.

Explanation:

Correct option: Market price is greater than marginal cost.

In a perfectly competitive market, there are large number of buyers and sellers. So, price is determined by the market forces.

At a point of profit maximization, price is equal to the marginal cost and we have to maximize the difference of the total revenue and total cost. It was not seen in a perfectly competitive market that the price is above the marginal cost at a profit maximizing point.

Therefore, option (d) is not true.

5 0
3 years ago
Other questions:
  • What does credit opening balance mean​
    6·2 answers
  • The company's adjusted trial balance includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated De
    11·1 answer
  • The key to understanding the money creation process is the fact that:______.a. since the money supply excludes cash but includes
    15·2 answers
  • What is the current standard used in law enforcement for compressing fingerprint images?
    12·1 answer
  • Take a look around your house and identify household products that work by means of an enzyme. name the products, and indicate h
    13·1 answer
  • Identify whether each of the following transactions will take place in an input market or in an output market, and whether firms
    8·1 answer
  • Read the following excerpt from a health record:
    8·1 answer
  • Which of the following is the least important in the sales process?
    5·1 answer
  • What measures the amount of time visitors spend on a website or application?
    9·1 answer
  • Scanlon Inc.'s CFO hired you as a consultant to help her estimate the cost of capital. You have been provided with the following
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!