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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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Your company is considering the replacement of an old delivery van with a new one that is more efficient. The old van cost $40,0
Helen [10]

Answer:

$51,164

Explanation:

The project's terminal cash flow is basically the cash flow of the project's last year.

depreciable value = $80,000 + $6,000 - $23,031 = $62,969

depreciation expense per year = $62,969 / 5 = $12,593.80 per year

net cash flow year 5 = [(savings - depreciation expense) x (1 - tax rate)] + depreciation expense + salvage value + recovery of net working capital = [($28,000 - $12,593.80) x (1 - 35%)] + $12,593.80 + $23,031 + $5,525 = $51,163.83 ≈ $51,164

7 0
2 years ago
A coupon bond that pays interest of 4% annually has a par value of $1,000, matures in 5 years, and is selling today at $785. The
jarptica [38.1K]

Answer:

Actual Yiel to maturity is 9.3%

Explanation:

Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.

Face value = F = $1,000

Coupon payment = $1,000 x 4% = $40

Selling price = P = $785

Number of payment = n = 5 years

Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]

Yield to maturity = [ $40 + ( $1,000 - $785 ) / 5 ] / [ ( 1,000 + $785 ) / 2 ]

Yield to maturity = [ $40 + $43 ] / $892.5  = $83 /$892.5 = 0.0645 = 0.093%

3 0
3 years ago
How do trade-offs decided by corporations and government impact our lives?
Fittoniya [83]

Explanation:

Trade offs are something in which there are two things and we choose one of them according to our own preference or need. This is and should be our personal decision, but when Corporations and Governments decide on what to choose between two things, there would might be a negative impact on someone's life. He might feel controlled by the corporations and governments. For example, if corporations of CNG decides with the government that it is better for consumers to use CNG than Petrol in their cars, and lowers taxes on CNG and encourage consumers to shift towards CNG, then this trade off will have an impact of being controlled by the big giants. The choice should be of consumer's. The consumer should be the one who will trade off between things who are preferable for him.

8 0
3 years ago
The Oriole Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents
vfiekz [6]

Answer:

Break-even point in units= 402 rooms a month

Explanation:

Giving the following information:

The inn has 50 rooms that it rents at $100 a night. Operating costs are as follows:

Salaries $7,500 per month

Utilities $1,500 per month

Depreciation $1,300 per month

Maintenance $1,760 per month

Maid service $24 per room

Other costs $46 per room

<u>First, we need to calculate the total fixed costs and the unitary variable cost.</u>

Total fixed costs= salaries + utilities + depreciation + maintenance

Total fixed costs= $12,060

Unitary variable cost= 24 + 46= $70

<u>To calculate the break-even point in units, we need to use the following formula:</u>

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 12,060/ (100 - 70)

Break-even point in units= 402 rooms a month

8 0
3 years ago
TuckIn, a restaurant chain, has hired a market research company to help it better understand its customers and their preferences
ludmilkaskok [199]

Answer:

B. The results are objective.

Explanation:

Thei return with the information that customer demand for quality in their dinner weren't met.

When the customer order something it is a plate it likes therefore, it should not return the order. If it does then, the restaurant is not doing a good job in the quality department.

It should check now for either decrease in their quality or adapt into the customers preference change

5 0
3 years ago
Read 2 more answers
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