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Juli2301 [7.4K]
3 years ago
15

Jand, Inc., currently pays a dividend of $1.22, which is expected to grow indefinitely at 5%. If the current value of Jand’s sha

res based on the constant-growth dividend discount model is $32.03, what is the required rate of return? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
Anastasy [175]3 years ago
4 0

Answer: 9%

Explanation:

The required rate of return is basically how much an investor is expecting in return for his investment.

The formula for price of stock is =

P = Do(1+g)/rs - g

P = price of stock

Do = dividend

g = growth

rs = required rate of return

We need to find out rs, therefore,

32.03 = 1.22(1+5%)/rs- 5% = 9%

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During its first year of operations, Mack's Plumbing Supply Co. had sales of $550,000, wrote off $8,800 of accounts as uncollect
vova2212 [387]

Answer:

$60,500

Explanation:

With regards to the above, the write off does not affect the realizable value of accounts receivables. Also, the total asset or net income is not affected by the write off or specific account. Instead, both assets and net income are affected in the period when bad debt expense is predicted and then recorded with an adjusting entry.

Accounts receivables

$550,000

Less:

Allowance for doubtful account

($550,00 × 2.5%)

($13,750)

Estimated realizable accounts receivables

$536,250

If the amount of bad debt decreases or increases as given below, then the income is also increased or decreased by the amount given.

Bad debts = $13,750

Uncollectible previously written off = $8,800

Difference

$4,950

Net income

$60,500

Less:

Difference

($4,950)

Reported income

$55,550

3 0
3 years ago
The ____ provide(s) schedule-related information about each activity, such as predecessors, successors, logical relationships, l
never [62]

Answer:

The answer is D. Activity attributes

Explanation:

Activity attributes are descriptive components of an activity. Examples of these attributes include;  activity name, description and responsible person.

6 0
3 years ago
A student claims that he can correctly identify whether a person is a business major or an agriculture major by the way the pers
Butoxors [25]
A business major 87% of the time, while 16% of the time mistakenly identifies an agriculture major.
4 0
3 years ago
At the least a channel of distribution consists of a producer and a(n) ________.
olga55 [171]

At the least a channel of distribution firms consists of a producer and a customer. They are consumers when they use the products that have been produced, the products that have been produced, the products that have been produced.

Producer markets: To make a profit, producers purchase things and services, change them into marketable products, and then sell those products to customers. Farmers, factories, and construction firms are some examples of producers. A producer is in charge of discovering and starting a project, securing funding, employing writers, directors, and other important members of the creative team, and supervising every stage of pre-production, production, and post-production up to release.

To learn more about producer, click here.

brainly.com/question/14616889

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6 0
1 year ago
If the book value per share is $40 and the market price is 52.50 per share calculate the required rate of return on the stock.
pav-90 [236]

Answer:

0.11 or 11%

Explanation:

The computation of the required rate of return is given below:

Required Rate of Return is

= Next Year Dividend ÷ Current Market Price + Growth Rate

= $3.15 ÷ $52.50 + 0.05

= 0.06 + 0.05

= 0.11 or 11%

working note

Given that

Current Market Price = $52.50

As we know that  

Growth Rate = Return on Equity × Retained Earning Ratio

Now  

Return on Equity = EPS ÷ Book Value of Share

= $5 ÷ 40

= 12.50%

So,  

Retained Earning Ratio is

= 1 - Dividend Payout Ratio

= 1 - 0.60

= 0.40

And,

Dividend Payout Ratio = DPS ÷ EPS

= $3 ÷ $5

= 0.60

Now

Growth Rate = 12.50% × 0.40

= 5%

So,

Next Year Dividend = Dividend Recently paid × (1 + growth rate )

= $3 × 1.05

= $3.15

7 0
2 years ago
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