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melisa1 [442]
3 years ago
11

This morning, you purchased a stock that will pay an annual dividend of $1.90 per share next year. You require a 12 percent rate

of return and the dividend increases at 3.5 percent annually. What will your capital gain be in dollars on this stock if you sell it three years from now?
Business
1 answer:
Zina [86]3 years ago
6 0

Answer:

$2.4302 per share

Explanation:

The computation of the capital gain in dollars is shown below:

Price at the end of third year - price of share now

where,

Price at end of 3 year = Dividend year 4  ÷ (0 .12 - .035)

                                   = $2.10656 ÷ 0.085

                                   = $24.7831 per share

The Dividend of year 4 is come from

= $1.90 × (1 + .035 )^3

= $1.90 × (1.035)^3

= $2.10656

And,

Price at end of 3 year is

= Dividend at year 4  ÷ ( .12 - .035)

= $2.10656 ÷ .085

= $24.7831 per share

And,

Price of share now is

= $1.90 ÷ (.12 -.035)

= $1.90 ÷ .085

= $22.3529

So,

Capital gain is

= $24.7831 - $22.3529

= $2.4302 per share

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According to the article, what should you do if you suspect your boss of unethical business practices?
Aleksandr-060686 [28]

Answer:

Report it to the right person

Explanation:

According to the article titled "What to do when you spot your employer doing something illegal" written by Catherine Conlan.

It says the best thing to do is to report it to the right person.

This is evident when it is stated in the article that "If you reasonably believe your employer is doing something illegal or unethical, you should first bring it to your supervisor’s attention... If it’s your supervisor you suspect, exhaust the chain of command within the company.

Hopefully, the company will investigate the matter. If no one within the chain of command responds, then there is generally a government agency with whom one can file a complaint,"

8 0
3 years ago
Crane Company purchased a new machine on October 1, 2022, at a cost of $89,920. The company estimated that the machine has a sal
guapka [62]

Answer:

For the year 2022 , $2,515

For the year 2023, $10,060

Explanation:

In this question, we are asked to compute the depreciation expense under the straight-line method for the years 2022 and 2023 for the new machine purchased by Crane company.

We employ a mathematical approach in tackling this.

Mathematically;

Straight line depreciation = (cost - salvage value)/ number of years useful

From the question we can identify the following;

Cost of purchase= $89,920

Salvage value = $9,440

Number of years useful = 8 years

Plugging this to get the straight line depreciation, we have;

(89,920-9,440)/8 = 80,480/8 = 10,060

For the year 2022, we have ; 3 months window since, machine was purchased October and we are assuming year end December 31st

Thus, straight line depreciation for year 2022 = 3/12 * 10,060 = $2,515

For 2023, straight line depreciation = 10,060( since we have a full year)

7 0
3 years ago
Read 2 more answers
g a. Provide the journal entry if the investor purchases the assets and assumes the liabilities of the investee company.
iragen [17]

Answer:

Debit : All assets bought at their Fair Value Amounts

Debit : Goodwill (<em>if Payment is greater than Net Assets acquired</em>)

Credit : All liabilities assumed at their Fair Value Amounts

Credit : Method of payment for example cash

Credit : Gain on acquisition (<em>if Net Assets acquired are greater than Payment</em>)

Explanation:

<em>Hi, your question is incomplete, i tried to look for the full question online but i could not find it.</em>

However, below is an explanation to solving the problem.

An acquisition of investee Assets and Liabilities is not a business combination transaction that requires preparation of consolidated financial statements.

A business combination is a transaction or event in which an ACQUIRER obtains CONTROL of one or more Businesses. So, if it is not a business, it is a mere ASSET ACQUISITION transaction.

Thus said, in our question investor purchases the assets and assumes the liabilities of the investee company, this is an Asset Acquisition transaction and not a Business Combination transaction.

The excess of consideration paid over the net assets acquired at fair value is called goodwill and must be recognized. If not the case the excess of net assets acquired over purchase price (gain on acquisition) must be recognized.

<u>Below are the accounting entries to record an Asset Acquisition transaction.</u>

Debit : All assets bought at their Fair Value Amounts

Debit : Goodwill (<em>if Payment is greater than Net Assets acquired</em>)

Credit : All liabilities assumed at their Fair Value Amounts

Credit : Method of payment for example cash

Credit : Gain on acquisition (<em>if Net Assets acquired are greater than Payment</em>)

5 0
2 years ago
Discuss the important issues that need to be considered while proofreading and checking a business document?
Lorico [155]
<h2>Spelling, punctuation, grammar, dealing with dates, logical flow of the content, maintaining the style throughout, etc. </h2>

Explanation:

Spelling:

The most important challenge that it has be considered seriously while proof reading. Misspelling of words may sometimes lead to false understanding of a sentence. If spellings are wrong it implies that the contents are not worthy.

Punctuation:

  • Necessary to get proper meaning
  • Makes document reader-friendly

Grammar:

  • This is an highlight of the content
  • Mandatory to follow good grammar

Logical flow:

  • To understand the meaning
  • To connect and understand the writer's point of view clearly

4 0
3 years ago
The following data refers to Huron Corporation for the year 20x2.
Molodets [167]

Answer:

1. schedule of cost of goods manufactured for 20x2

Beginning Work In Process Inventory                                            $ 0

Direct  Materials ($89,000 + $731,000 - $59,000 - $45,000) $716,000

Direct Labor                                                                                 $474,000

Applied manufacturing overhead                                              $577,500

Less Ending Work In Process Inventory                                    ($40,000)

cost of goods manufactured                                                    $1,727,500

2. schedule of cost of goods sold for 20x2.

Beginning Finished goods inventory                     $35,000

Add cost of goods manufactured                       $1,727,500

Less Ending Finished goods inventory                ($40,000)

Cost of Goods Sold                                             $1,722,500

Adjustment :

Less Under-applied Overheads                             ($2,500)

Adjusted Cost of Goods Sold                            $1,720,000

3. income statement for 20x2.

Sales revenue                                                    $2,105,000

Less Cost of Goods Sold                                 ($1,720,000)

Gross Profit                                                          $385,000

Less Expenses :

Selling and administrative expenses               ($269,000)

Net Profit Before tax                                             $116,000

Income tax expense                                            ($25,000)

Net Income after tax                                              $91,000

Explanation:

Calculation of Actual Overheads Incurred

Indirect labor                                                    $150,000

Property taxes on factory                                 $90,000

Depreciation on factory building                    $125,000

Indirect material used                                       $45,000

Depreciation on factory equipment                $60,000

Insurance on factory and equipment              $40,000

Utilities for factory                                             $70,000

Actual Overheads Incurred                            $580,000

Now,

Where Applied Overheads is $577,500 and Actual Overheads is $580,000, we have an underapplied situation of $2,500 ($580,000 - $577,500).

This under-applied amount is closed off to the cost of goods sold.

3 0
3 years ago
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