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Alexeev081 [22]
3 years ago
11

Green Caterpillar Garden Supplies Inc. just reported earnings after tax (also called net income) of $9,750,000, and a current st

ock price of $14.74 per share. The company is forcasting an increase of 25% of its after-tax income next year, but it also expects it will have to issue 2,900,000 new stock (raising its shares outstanding from 5,500,00 to 8,400,000).
If Green Caterpillar's forceast turns out to be correct and its price-to-earnings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now? (Round an P/E ratio calculation to four decimal places).

a. $12.08 per share
b. $14.75 per share
c. $9.06 per share
d. $15.10 per share
Business
1 answer:
astra-53 [7]3 years ago
3 0

Answer:

a. $12.08 per share

Explanation:

For computing the next year stock we have to do the following calculations  

Current Earning per share  = Net Income ÷ Number of Common Shares Outstanding

= $9,750,000 ÷ 5,500,000 shares  

= $1.77

Current Price Earning ratio = Current stock price ÷  Current EPS

= $14.74 ÷ $1.77

= 8.33

Now Next year earning per share = $9,750,000 ×  1.25 ÷ 8,400,000 shares = $1.45

So, the next year stock price = $1.45 x 8.33

= $12.08 per share

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The fixed cost of Brendon Willows, a baseball bat manufacturing company, is $500,000 per year. The cost of wood and labor to man
Inessa [10]

Answer:

option (B) 25,000

Explanation:

Data provided in the question:

Fixed cost = $500,000 per year

Cost of wood and labor to manufacture one bat = $5

Selling price of the bat = $25

Now,

At breakeven, total cost equals to the total revenue

let the breakeven quantity be 'x'

thus,

$500,000 + $5x = $25x

or

$25x - $5x = $500,000

or

$20x = $500,000

or

x = 25,000

Hence,

the correct answer is option (B) 25,000

7 0
3 years ago
In order to make sure it is possible to clean the floors under shelving units in food establishments, the shelves must be at lea
soldier1979 [14.2K]
The shelves must be at least SIX [6] INCHES above the floor. This is necessary in order to facilitates proper cleaning of the floors, the unobstructed space below the shelf will make it easier to clean the underneath of the shelves. This will prevent cockroaches and other kitchen pests from habouring the space.
3 0
3 years ago
A company has preferred stock with a current market price of $18 per share. The preferred stock pays an annual dividend of 4% ba
scZoUnD [109]

Answer:

Answer:

Dividend (D) = 4% x $100 = $4

Current market price (Po) = $18

Flotation cost (FC) = $1.50

Tax rate (T) = 40% = 0.40

Kp =   <u> D </u>

       Po-FC

Kp =   <u>  $4 </u>

        $18-$1.50

Kp = <u>$4 </u>

      $16.5

Kp = 0.24 = 24%

Explanation:

Cost of preferred stock equals dividend divided by the difference between current market price and flotation cost. Cost of preferred stock is not tax deductible.

3 0
3 years ago
Product innovation refers to efforts to create designs and applications of technology to develop new products, while __________
Troyanec [42]

Answer:

Process innovation

Explanation:

Product innovation refers to efforts to create designs and applications of technology to develop new products, while <u>process</u> innovation refers to efforts to improve the efficiency of organizational systems such as manufacturing and operations.

Process inovation: It is a type of innovation that involve in improvement of process in producing goods and services. It also implement new technique and procedure to improve production or delivery method. It is also effective in reducing cost of production.

5 0
3 years ago
If current assets are $110,000 and current liabilities are $50,000, working capital will be:
pantera1 [17]

Hello!

Working capital=current assets-current liabilities

Working capital=110000-50000
Working capital=60000

Good luck!

6 0
3 years ago
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