Answer:
B. has a higher market price per dollar of earnings than does one share of Turner's.
Explanation:
The correct answer is the first option. By protecting the privacy of personal information collected on its website a company like apple would be behaving in a socially responsible way towards its customers. Technology companies like apple have a responsibility to protect the personal information of its customers, if this wasn't the case then people would not buy their products as they would not have any faith in the company.
Answer:
WACC = 0.1018 or 10.18%
Explanation:
The WACC or Weighted average cost of capital is the cost of a firm's capital structure that can be made of one or all of the following components namely debt, preferred stock and common equity.
The formula to calculate is as follows,
WACC = wD * tD * (1- tax rate) + wP * rP + wE * rE
Where,
- w represents the weight of each component in capital structure
- r represents the cost of each component
- D, P and E represents debt, preferred stock and Common Equity respectively.
Cost of bond = 7%
Cost of preferred stock = 4/40 = 10%
<u>Cost of Common Equity : </u>
25 = 2 / (r - 0.07)
25 * (r - 0.07) = 2
25r - 1.75 = 2
25r = 2 + 1.75
r = 3.75 / 25
r = 0.15 or 15%
WACC = 0.4 * 0.07 * (1 - 0.4) + 0.1 * 0.1 + 0.5 * 0.15
WACC = 0.1018 or 10.18%
Answer:
$100,340
Explanation:
<em>The amount of cost recorded in the asset account would be:</em>
List price $93,000
Less: Discount ($93,000*2%) $1,860
Add: Freight $3,800
Add: Installation&Testing <u>$5,400 </u>
Cost of the machine <u>$100,340</u>
Note: Insurance cost is not included in the cost of the machine
Answer:
Present value = $24.009009 rounded off to $24.01
The maximum price that should be paid for a share today is $24.01
Explanation:
To calculate the price of the stock today that should be paid, we can use the discounted cash flow approach. It calculates the value of stock today based on the present value of future values of cash flows that are expected from the stock. Thus the present value of a stock that is expected to pay a dividend and sell for a given price in 1 year can be calculated as follows,
Present Value = [D1 + P1] / (1+r)
Where,
- D1 is the next dividend expected from the stock
- P1 is the price of the stock in 1 year
- r is the required rate of return
Present value = [1.65 + 25] / (1+0.11)
Present value = $24.009009 rounded off to $24.01