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3 years ago

Financial educators often recommend that individuals should:

Business

1 answer:

Marina86 [1]3 years ago

3 0

Answer: D

Explanation: it is advisable to use government benefits as an important source of income prior to retirement. Since income will no longer flow like before during the retirement period, government benefit and other allowance remain as the source of income for especially in a situation where there is no other private source of income.

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You are considering the purchase of a common stock that paid a dividend of $3.00 yesterday. You expect this stock to have a grow

Ray Of Light [21]

Answer:

$50.8

Explanation:

As per given Data

Dividend Paid = $3

Worth of the stock is the present value of all the cash flows associated with the stock. Dividend is the only cash flow that a stock holder receives against its investment in the stocks. We need to calculate the present values of all the dividend payments.

Formula for PV of dividend

PV of Dividend = Dividend x ( 1 + growth rate )^n x ( 1 + r )^-n

1st year

PV of Dividend = $3 x ( 1 + 20%)^1 x ( 1 + 14% )^-1 = $3.16

2nd year

PV of Dividend = $3 x ( 1 + 20%)^2 x ( 1 + 14% )^-2 = $3.32

3rd year

PV of Dividend = $3 x ( 1 + 20%)^3 x ( 1 + 14% )^-3 = $3.50

After three years the dividend will grow at a constant rate of 5%, so we will use the following formula to calculate the present value

PV of Dividend = [ $3 x ( 1 + 20%)^3 x ( 1 + 5%) / ( 14% - 5% ) ] x [ ( 1 + 14% )^-3 ]

PV of Dividend = $40.82

Value of Stock = $3.16 + $3.32 + $3.50 + $40.82 = $50.8

6 0

3 years ago

A firm’s stock is expected to pay a $2 annual dividend next year, and the current $50 stock price is expected to rise to $60 ove

pochemuha

Answer:

Expected rate of return will be 24%

So option (b) will be correct option

Explanation:

We have given dividend in next year will be $2

So dividend $D_1=2$ $

Current stock price $P_0$ = $50

And it is given that in next year stock price is $60

So growth rate $=\frac{60-50}{50}=0.2$ = 20%

We have to find the expected return after 12 month, that is after 1 year

We know that current price is given by $P_0=\frac{D_1}{R_e-g}$

$50=\frac{2}{R_e-0.2}$

$50R_e-10=2$

$50R_e=12$

$R_e=0.24$ = 24%

So expected rate of return will be 24%

So option (B) will be correct option

3 0

2 years ago

For each separate case below, follow the three-step process for adjusting the unearned revenue liability account at December 31

Vadim26 [7]

Answer:

1. Assume no other adjusting entries are made during the year a. Tao Co. receives $10,000 cash in advance for four months of legal services on October 1, 2017, and records it by debiting Cash and crediting Unearned Revenue both for $10,000. It is now December 31, 2017, and Tao has provided legal services as planned. hat adjusting entry should Tao make to account for the work performed from October 1 through December 31, 2017?

Step 1: Unearned Revenue has a credit balance of $10,000

Step 2: Unearned Revenue should have a credit balance of $2,500 only.

Step 3: Adjusting Journal Entry:

Debit Unearned Revenue $7,500

Credit Service Revenue $7,500

To record revenue for services performed to December 31, 2017.

2. Caden started a new publication called Contest News. Its sub subscriber, Caden debits Cash and credits Unearned Subscription Revenue for the amounts received. The company has 100 new subscribers as of July 1, 2017. It sends Contest News to each of these subscribers every month from July through December Assume no changes in subscribers, prepare the journal entry that Caden must make as of December 31, 2017, to adjust the Subscription Revenue account and the Unearned Subscription Revenue account pay $24 to receive 12 monthly issues.

Step 1: Unearned Subscription Revenue has a credit balance of $2,400

Step 2: Unearned Subscription Revenue should have a credit balance of only $1,200.

Step 3: Adjusting Journal Entry:

Debit Unearned Subscription Revenue $1,200

Credit Subscription Revenue $1,200

To record subscription revenue for services performed to December 31, 2017.

Explanation:

Tao Co and Caden follow the three-step process of adjusting unearned revenue liability accounts at year-end. The purpose of the steps is to ensure that correct amounts remain as balances in the unearned revenue accounts. The steps also help to adjust the Earned Revenue account to its proper amount in recognition of goods or services provided in accordance with the accrual concept and the matching principle of generally accepted accounting principles.

8 0

2 years ago

For business and personal finance: What is insurance?

maksim [4K]

Answer:

Insurance is the procedure by which persons or companies exposed to a specific risk agree with an institution specializing in compensation for damage that the institution will indemnify the damage caused when the risk materializes. The resulting contract is called insurance.

From a commercial point of view, insurance can be defined as the means by which the cost of incidental damage can be converted evenly into a continuous annual cost on an annual basis.

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2 years ago

Hey guys, what is the best vacation you ever had? Tell me all about it, mine was when i went to myrtle beach south carolina with

alekssr [168]

Answer:

Hey my best vacation was to India when I had visited a lot of places and temples.....I had also a great time with my family....I had eaten fresh mangoes that grew in my farm....I miss those days

5 0

3 years ago