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vovangra [49]
3 years ago
9

Burnett Corp. pays a constant $8.25 dividend on its stock. The company will maintain this dividend for the next 13 years and wil

l then cease paying dividends forever. If the required return on this stock is 11.2 percent, what is the current share price
Business
2 answers:
Valentin [98]3 years ago
6 0

Answer:

$55.134

Explanation:

Given

dividend paid on its stock = $8.25

Duration is next 13 years

P0 = dividend on its stock × (PVIFA of return on this stock,years)

Remember PVIF = (1 - (1 + r)^-n)/r

Where PVIFA = present value interest factor of annuity

r = interest rate per period

n = number of periods

Therefore

P0 = $8.25 × (PVIFA11.2%,13)

P0 = $55.134

Elina [12.6K]3 years ago
4 0

Answer:

$54.99

Explanation:

D = $8.25

R = 11.25

n =13

Perpetuity Formula is to be used

P0 = sum of discounted dividends

      =D/1+r ^n     =8.25/(1.1125)^1+8.25/(1.1125)^2+8.25/(1.1125)^3+8.25/(1.1125)^4+8.25/(1.1125)^5+8.25/(1.1125)^6+8.25/(1.1125)^7+8.25/(1.1125)^8+8.25/(1.1125)^9+8.25/(1.1125)^10+8.25/(1.1125)^11+8.25/(1.1125)^12+8.25/(1.1125)^13

      =$54.99

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Eric works at an electronics store in a mall. Eric doesn't like to work hard, and it costs him $100 to do so. Eric's employer ca
SCORPION-xisa [38]

Answer: work hard; $65; less; $85

Explanation:

The following can be deduced from the question:

The Expected profit from working hard will be:

= (90% × $200) + (10% × $50)

= (0.9 × $200) + (0.1 × $50)

= $180 + $5

= $185

Then, the profit will be the difference between revenue and coat which will be:

= $185 - $100

= $85

Then, the expected profit from shirking will be:

= (90% × $50) + (10% × $200)

= (0.90 × $50) + (0.10 × $200)

= $45 + $20

= $65

Then, the profit will be:

= $65 - $0

= $65

Eric will (work hard) because the net gain of ($65) from shirking is (less) than the net gain of ($85) from working hard.

7 0
3 years ago
Luis refuses to shop at big box stores, preferring to do his shopping locally. He reads in the paper that one of these stores wi
Trava [24]

Answer:

Selective retention.

Explanation:

Selective retention occurs when a person more easily remembers things that are closer to their beliefs, values, and Interests than things that are not.

Luis does not want to do his shopping at big box stores but prefers to shop locally. So when he reads about one of the big box stores (which is not his preference) is doing a big sale next week, he does not remember it because it is not consistent with what he wants. This is an example of selective retention.

7 0
3 years ago
Calistoga Produce estimates bad debt expense at 0.50% of credit sales. The company reported accounts receivable and allowance fo
AveGali [126]

Answer:

$1,345

Explanation:

Calculation to determine what Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2021, is

First step is to calculate the Expense amount

Expense=Credit sales $315,000* .5%

Expense=$1,575

Second step is to calculate the Allowance

Allowance 12/31/2020 $1,650

Less Write-offs(1,880)

Allowance ($ 230)debit

Now let calculate the final balance in its allowance for uncollectible accounts

December 31, 2021 allowance for uncollectible accounts= ($230) + $1,575

December 31, 2021 allowance for uncollectible accounts=$1,345

Therefore Calistoga's final balance in its allowance for uncollectible accounts at December 31, 2021, is $1,345

7 0
3 years ago
The capital account balances for Donald & Hanes LLP on January 1, 2018, were as follows: Donald, capital $ 200,000 Hanes, ca
m_a_m_a [10]

Answer:

Donalds share in the capital was 100,000/300,000= 1/3

May bought 35% so 0.35 of 300,000 = 105,000

Out of this 105,000 1/3 was donalds share so, 1/3*105,000=34,650

Donalds new share = 100,000- 34,650 = 65,350

$65,350 is Donalds new capital account balance

Explanation:

Step 1: Find out Donalds ratio of capital

Step 2: Find out how much may needed to invest for a 35% share

Step 3: Multiply Mays share by 1/3 to find out how much of that share will be bought from donald

Step 4: Subtract the amount from Donalds original capital balance

3 0
3 years ago
Restaurant A uses 60 bags of tomatoes each month. The tomatoes are purchased from a supplier for a price of $80 per bag and an o
ch4aika [34]

Answer:

Explanation:

D = 60 bags

cost = 80 / bag

s = 20 / order

h = 40% of cost

     0.4 * 80 / 100

h= 32 unit/year

D =  d * 12 months

D = 60 * 12

D = 720 bags / year

EOQ = \sqrt{2DS/H}

EOQ = \sqrt{2 *720*20/32}

EOQ = 30 bags

Total cost =  Total holding cost + total ordering cost

Total holding cost  = (Q/2 * H) = (30/2 * 32) = 480

Total ordering cost =  (D/Q * 20) = (720/30 *20) = 480

Total cost = 480 + 480 = 960

Total purchasing cost  = cost * D = 80 * 720 = 57.600

Percentage= total cost  / total purchasing cost  * 100

960 / 57.600 * 100

1.67 %

6 0
3 years ago
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