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Dominik [7]
2 years ago
15

Quantitative Problem 1: Hubbard Industries just paid a common dividend, D0, of $1.30. It expects to grow at a constant rate of 2

% per year. If investors require a 10% return on equity, what is the current price of Hubbard's common stock? Do not round intermediate calculations. Round your answer to the nearest cent.
Business
1 answer:
blondinia [14]2 years ago
6 0

Answer:

Current price is equal to $16.575

Explanation:

It is given common dividend D_0=1.30

Growth rate = 2% = 0.02

Required rate of return = 10% = 0.1

Dividend paid in next year

D_1=D_0(1+g)=1.30\times 1.02=1.326

Current price is given by P_0=\frac{D_1}{R_e-g}

P_0=\frac{1.326}{0.1-0.02}=16.575

Therefore current price is equal to $16.575

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Answer:

$25,000

Explanation:

The computation of the  break-even point in sales dollars is shown below:

Break even point = (Fixed expenses) ÷ (Profit volume Ratio)  

where,  

Contribution margin per unit = Selling price per unit - Variable expense per unit  

= $100 - $60

= $40

And, Profit volume ratio = (Contribution margin per unit) ÷ (selling price per unit) × 100

So, the Profit volume ratio = ($40) ÷ ($100) × 100 = 40%

And, the fixed expenses is $10,000

Now put these values to the above formula  

So, the value would equal to  

= ($10,000) ÷ (40%)  

= $25,000

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3 years ago
Both nondeductible contributions to a traditional IRA and contributions to a Roth IRA are similar in the sense that neither prov
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Answer:

The query definition is mentioned in the clarification section following.

Explanation:

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2 years ago
Which of the following statements regarding service companies is true?
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Explanation:

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3 years ago
Read 2 more answers
Exercise 23-7 Rensing Ltd. estimates sales for the second quarter of 2017 will be as follows. Month Units April 2,600 May 2,470
swat32

Answer:

Raw materials purchases cost for May 10,160

Explanation:

May production

sales            2,470

ending          2,130

beginning   <u> (2,200) </u>(ending of April)

<em>units to be produced 2,400</em>

Raw material budget

production needs                      2,400

desired ending inventory

       2,600 x 70% =                     1,820

beginning inventory

      may production x 70%

      2,4000 x 70%  =                 (1,680)

total raw materials purchase     2,540

It will puchase raw materials for 2,540 units. Each units require $4 of raw materials.

total cost for raw materials:

2,540 x $4 =  10,160

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