What happens if there is zero inflation and no standard cost of living?

"A high-ranking officer of ABC Corporation owns 10,000 shares of ABC Corporation control stock that she wishes to sell under the

LuckyWell [14K]

Answer: $9,000

Explanation:

Rule 144 is a regulation that governs the trading of restricted, unregistered, and control securities and is enforceable by the SEC.

Under the rule, the person, as an officer of the ABC Corporation is limited to selling the higher of 1% of the Outstanding stock the company has or the average weekly trading volume over the preceding 4 weeks.

1% of the outstanding 900,000 shares is;

= 1% * 900,000

= 9,000 shares

This is higher than the average weekly trading volume over the preceding 4 weeks so this is the maximum permitted sales figure.

3 0

4 years ago

Assume that Kish Inc. hired you as a consultant to help estimate its cost of common equity. You have obtained the following data

Kobotan [32]

Answer:

Cost of equity= 10,50%

Explanation:

The cost of equity is the return a company requires to decide if an iThe cost of equity is the return a company requires to decide if an investment meets capital return requirements. A firm's cost of equity represents the compensation the market demands in exchange for owning the asset and bearing the risk of ownership.

Cost of equity= (D1/P0)+g

D1= next year dividend (D0*

P0=actual price

g= growth rate of dividends

In this exercise:

D1=D0*(1+g)=0,90*1,07=$0,963

P0=$27,50

g=0,07

Cost of equity= 0,963/27,5+0,07=0,1051=10,50%

8 0

3 years ago

At the beginning of the current year, Snell Co. total assets were $264,000 and its total liabilities were $182,200. During the y

larisa [96]

Answer:

The company's debt ratio at the end of the current year is 66%

Explanation:

For computing the debt ratio, we need to apply the formula which is shown below:

Debt ratio = (Total liabilities) ÷ (total assets) × 100

= ($182,200 ÷ $276,000) × 100

= 66%

The other information which are given in the question is of no use. That's why we do not consider it. Hence, ignored it.

7 0

4 years ago

Floors and Fixtures, a home improvement store, is planning to expand and open four new stores, one each year. As a result, it de

IrinaK [193]

Options:

A. Operational

B. Tactical

C. Static

D. Strategic

D. Growth

Answer:D. Growth

Explanation:Growth plans are Activities put in place to enhance that an organisation attains its growth Objectives.

A Growth plan identifies potential opportunities for growth and makes the required resources available in irder to sponsor the potential opportunities.

A growth plan contains business elements which can help the a business Organisation identify the value of customers and how to meet the needs of the customers which will help to enhance the growth of the business through increased revenue.

5 0

3 years ago

Read 2 more answers

The stock of Nogro Corporation is currently selling for $10 per share. Earnings per share in the coming year are expected to be

V125BC [204]

Answer:

a) required rate of return = 10%

b)Also, if there is no growth then Return on Equity will be equal to the Required rate of return. Hence there won't be any change.

c) a cut in the dividend payout to 25% will have no effect or impact and as such the stock price will remain the same.

A complete elimination of dividend will not affect the stock price as well.

Explanation:

The question is in three parts and will be answered accordingly

a) The Required Rate of Return = (The Dividend Expected for the next year/ Current Price of Stock) + the Growth rate

First, we calculate the Dividend expected per share for the next year

=earnings per share x Dividends pay out ratio

=$2 /$10 = 20%

Secondly, we now calculate the return on equity as follows

= Expected Earnings Per share / Current Selling price

= $2 x (1-50%) = 10%

The third is to calculate the Growth rate =

Return on Equity x (1 - Dividend payout ratio)

= 20% x (1-50%) = 10%

Using this with the formula of required rate of return

= ($1 /$10) +10% = 20%

b) First the assumption is that all earnings were paid as dividend with no reinvestment and in this scenario, the lack of reinvestment will mean no growth. Also, if there is no growth then Return on Equity will be equal to the Required rate of return. Hence there won't be any change.

c) Because the Return on Equity is equal to required rate of return, it means a cut in the dividend payout to 25% will have no effect or impact and as such the stock price will remain the same.

A complete elimination of dividend will not affect the stock price as well.

6 0

3 years ago