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
Murljashka [212]
3 years ago
14

Suppose a company currently pays an annual dividend of $6.00 on its common stock in a single annual installment and management p

lans on raising this dividend by 5 percent per year, indefinitely. If the required return on this stock is 14 percent, what is the current share price?
Business
2 answers:
Andrej [43]3 years ago
8 0

Answer:

The current share price is $70

Explanation:

The constant growth in dividend will require the Gordon Growth model. The formula for the price of stock can be written as,

P0 = D1 / r-g

Where,

  • D1 is the dividend expected next year
  • r is the required rate of return
  • g is the growth rate in dividends

P0 = 6*(1+0.05) / 0.14 - 0.05

P0 = $70 per share

NNADVOKAT [17]3 years ago
8 0

Answer:

The price of the current share is $70

Explanation:

Value of the stock:

The Value of the stock of the organization is the current estimation of its incomes limited at the profits required by the speculators.  

In the event that the profits of the organization are foreseen to develop at steady rate, at that point following equation can be utilized to esteem the stock:

P_{0} = D_{1} / r-g

Where,

P_{0}  = Current price of the stock

D_{1} = Next dividend expected,

r = Required return of investors

g = Constant growth rate

Thus, the current price of the company paying annual dividend can be calculated as:

P_{0} = D_{1} / r-g

P_{0} = 6 * (1 + 0.05) / 0.14 - 0.05

P_{0} = 70

You might be interested in
Forest Components makes aircraft parts. The following transactions occurred in July.
rjkz [21]

Answer and Explanation:

Answer and explanation attached

Beginning raw materials = ending raw materials +raw materials for production+issued raw materials- raw materials purchased -raw materials returned from production= $79800

Cost of goods manufactured =ending finished goods+cost of goods sold -beginning finished goods= $553000

Beginning work in progress inventory=

Ending work in progress + cost of goods manufactured + materials returned - manufacturing overhead applied- issued raw materials-direct labour wages =$105490

4 0
3 years ago
On January 2, 2016, Alpha Company purchased a patent for $38,500 plus $2,000 in legal fees. On that date, the patent had a remai
Fittoniya [83]

Answer:

General Journal entry:

Account                                     Debit                             Credit

Amortization expense              $6,750

Accumulated Amortization                                              $6,750

(patent)

Explanation:

Given Data:

Price of patent=$38,500

Legal fees=$2,000

legal Life=13 years

useful life=6 years

Required:

Journal Entry

Solution:

Amortization:

For intangible assets, amortization is the decrease in book value over the period of time. However intangible assets have no physical appearance and they do not face any damage like fixed assets but with the passage of time their value decrease.

Calculating amortization expense for one year:

Amortization expense=\frac{Purchase\ Price+Legal\ Fees}{Useful\ Life}

Amortization\ expense=\frac{\$38,500+\$2000}{6}\\ Amortization\ expense=\$6,750

General Journal entry:

Account                                     Debit                             Credit

Amortization expense              $6,750

Accumulated Amortization                                              $6,750

(patent)

7 0
3 years ago
Explain the definition of Human Resources Management
Arlecino [84]

Answer:

Human resource management (HRM or HR) is the strategic approach to the effective management of people in a company or organization such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service of an employer's strategic objectives. Human resource management is primarily concerned with the management of people within organizations, focusing on policies and systems. HR departments are responsible for overseeing employee-benefits design, employee recruitment, training and development, performance appraisal, and reward management, such as managing pay and Employee benefits benefit systems. HR also concerns itself with organizational change and industrial relations, or the balancing of organizational practices with requirements arising from collective bargaining and

Explanation:

The Oppoturnity to employ Workers and to make sure their comfortable

5 0
3 years ago
Variable manufacturing overhead incurred was $245,000. Fixed manufacturing overhead incurred was $373,000. Actual machine-hours
steposvetlana [31]

Before information shows is the correct and complete question.

The Lopez Company use a standard costing in its manufacturing plant for the auto part. The standard cost of particular auto part based on a denominator level of a 4.000 output unit per year. included 6 machine-hours of variable manufacturing overhead at $8 per hour and 6 machine-hours of fixed manufacturing overhead at $15 per hour.

Actual output produced was 4.400 units.

Variable manufacturing overhead incurred was $245.000.

Fixed manufacturing overhead incurred was $373.000.

Actual machine-hours were 28.400.

Prepare the analysis of all variable manufacturing overhead and fixed manufacturing overhead variances.

Additional diagram attached to this question is displayed in the first image below.

Answer:

Explanation:

By using a columnar method, the analysis of all the variance & fixed manufacturing overhead varaince can be computed as follows:

Variable manufacturing overhead analysis:

Actual cost Incurred: ║ Actual input ×  Budgeted ║ Allocated: Budgeted

Actual input × Actual     rate                                        Input for actual output

rate                                                                               × Budgeted rate

245000                         28400×$8.00 = 227200      (4400×6hrs×$8)

                                                                                      = 211,200

                17800 U                    16800  U

            Spending Variance      Efficiency Variance

                                      33800 U

                                Flexible Budget Variance

Hence;

The spending Variance = $17,800 U

Efficiency Variance  = $16,000 U

Flexible Budget Varaince = $33800 U

where;   F = Favourable  & U = Unfavourable

<u>For the fixed Manufacturing Overhead:</u>

Actual cost Incurred: ║ Flexible Budget Lump ║ Allocated: Budgeted

Actual input × Actual     sum regardless of the    Input for actual output

rate                                 output level                     × Budgeted rate

                                                                             

373000                        4000×6hrs×15 = 360000  (4400×6hrs×$15)

                                                                                      = 396000

13000 U                                   36000  F

Spending Variance/               Production-Volume

Flexible budgeted variance   Variance

                                                 23000 F

                                        Over allocated fixed

                                        Overhead

Hence;

The spending Variance = $13000 U

The production Volume Variance  = $36,000 F

Over allocated fixed overhead = $23000 F

where;   F = Favourable  & U = Unfavourable

NOTE: To have a better view of the above computation in a table format, refer to the second and the third diagram in the image below.

8 0
2 years ago
Spartan Corporation estimates that it will incur $200,000 of total manufacturing overhead cost at an estimated activity level of
bagirrra123 [75]

Answer:

Applied manufacturing overhead is $4,000

Explanation:

Given,

Total manufacturing overhead = $200,000

Activity level = 10,000 DLH

Predetermined overhead rate = \frac{Manufacturing\ overhead\ cost}{Activity\ level}

=\frac{200,000}{10,000}

=$20

Manufacturing overhead applied = predetermined rate × time required

                                                       = 20 × 200

                                                       = $4,000

Therefore, manufacturing overhead of $4,000 is applied to the job.

3 0
3 years ago
Other questions:
  • If the management of an entity is close to breaching a debt covenant that requires maintaining a certain current ratio, manageme
    9·1 answer
  • When the cost of the cpi market basket increases from one year to the next we know that?
    5·1 answer
  • On November 10 of the current year, Flores Mills sold carpet to a customer for $8,500 with credit terms 2/10, n/30. Flores uses
    8·1 answer
  • Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increa
    13·1 answer
  • When the Ideal State is higher than the Actual State, from the perspective of marketers, it is referred to as
    14·1 answer
  • The college bookstore sells a textbook that costs $80 for $94 and a textbook that costs $84 for $98.70. If the markup policy of
    14·2 answers
  • The Cozy Company manufactures slippers and sells them at $ 10 a pair. Variable manufacturing cost is $ 5.75 a​ pair, and allocat
    14·1 answer
  • A loan processing operation that processes an average of 7 loans per day. The operation has a design capacity of 10 loans per da
    15·1 answer
  • PLEASE HELP! WILL MARK BRAINLIEST!! 10 POINTS
    10·1 answer
  • What is legal citizenship defined as
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!