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Pretty sure its A
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Answer
The answer and procedures of the exercise are attached in the following images.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in 2 sheets with the formulas indications.
Answer:
c. requires the growth rate to be less than the required rate of return
Explanation:
The Dividend growth model was formulated by Myron Gordon.
The model helps in determination of market price of a stock ( )
It is given by the following formula:
where = Current market price per share/stock
= Last paid dividend per share
g = annual growth rate in dividends denoted in percentage
= Cost Of Equity or Investor's required rate of return
The model assumes constant rate of growth in dividends. Another major shortcoming of the model being it's assumption of constant required rate of return of the investors.
One of the assumptions of Dividend Growth Model is,
Dividend Growth Rate < Required rate of return
Answer:the adjustment to record bad debts for the period will require a
Debit on
Bad debt expenses for $ 12,670 and a credit To Allowance for doubtful accounts for $ 12,670
Explanation:
Account receivables for uncollectibles= $13,900
Allowance for Doubtful Accounts = credit balance of $1230
Adjusting entry for bad debts expense =Account receivables - credit balance of $1230
= $13,900- $1,230
=$12,670
Adjusting entry for the record of bad debts expense
Accounts titles Debit Credit
Bad debt expenses $ 12,670
To Allowance for doubtful accounts $ 12,670
Answer:
If you invest $24 at a 5% rate during five years, you will earn:
$24 x (1 + 5%)⁵ = $24 x 1.2763 = $30.63
After 50 years, and at the same 5%, you will earn:
$24 x (1 + 5%)⁵⁰ = $24 x 11.4674 = $275.22
I guess that back then $24 was a lot of money, or at least a considerable amount since that was Manhattan's price (at least its equivalent price in trinkets). Or maybe he was a better negotiator than most modern politicians.