Answer:
The price does the dividend-discount model predict Colgate stock should sell for today is $66.47
Explanation:
In order to calculate the price does the dividend-discount model predict Colgate stock should sell for today we would have to calculate first the Present value of dividend of next 5 years as follows:
Present value of dividend of next 5 years as follows=
Year Dividend Discount factor Present value
a b c=1.085^-a d=b*c
1 $ 1.62 0.921659 $ 1.49
2 $ 1.74 0.849455 $ 1.48
3 $ 1.86 0.782908 $ 1.46
4 $ 1.98 0.721574 $ 1.43
5 $ 2.10 0.665045 $ 1.40
Total $ 7.25
Then, we have to calculate the Present value of dividend after 5 years as follows:
Present value of dividend after 5 years=D5*(1+g)/(Ke-g)*DF5
Present value of dividend after 5 years=$2.10(1+6%)/(8.50%-6%)*
0.665045
Present value of dividend after 5 years=$59.22
Current value of stock=Present value of dividend of next 5 years+ Present value of dividend after 5 years
Current value of stock= $7.25+$59.22
Current value of stock=$66.47
The price does the dividend-discount model predict Colgate stock should sell for today is $66.47
Answer:
Dr Payroll Tax Expense: $2,321
Cr FICA- Social security taxes payable $1,054
Cr FICA- Medicare taxes payable $247
Cr SUTA-State unemployment taxes payable $918
Cr FUTA- Federal unemployment taxes payable $102
Explanation:
Preparation of the March 31 journal entry to record the March payroll taxes expense
March 31
Dr Payroll Tax Expense: $2,321
($1,054+$247+$918+$102)
Cr FICA- Social security taxes payable $1,054
[($1,700*10)*6.2%]
Cr FICA- Medicare taxes payable $247
[($1,700*10)*1.45%]
Cr SUTA-State unemployment taxes payable $918
[($1,700*10)*5.4%]
Cr FUTA- Federal unemployment taxes payable $102
[($1,700*10)*0.6%]
(To record payroll taxes expense)
The correct option is A. The effect of tax cut is reduction in the amount of money that the government is generating and increase in the amount of money available to those whose taxes are reduced. Government usually cut taxes in order to boost the economy through increased spending.
Answer: $122.40
Explanation:
Jack's year to date pay has already exceeded the $7,000 limit on which State and Federal Unemployment taxes can be charged on his pay.
The amount the employer will pay is;
= FICA OASI Tax + FICA Medicare tax
= (1,600 * 6.2%) + (1,600 * 1.45%)
= 99.20 + 23.20
= $122.40
Answer: smaller pipe
Explanation: for the first alternative that is constructing with bid size pipe which cost total of $115 million throughout the 50 years and a pumping cost which cost $25000 less than the smaller pipe for the next 16 years of which after those years, it will be equal.
While the smaller pipe cost $65million + $100million = $165million then plus the pumping cost which is equally higher than the big pipe cost . Already there is a difference in cost(minus pumping cost)= $165-115= $50million.
And then $25,000 *16 years= $400000 .
So the total difference in cost for the first 16 years is $50.4 million.
So now with interest rate of 8% you'll see that much capital is used in the smaller pipe , so if both pipe system receive interest rate of 8%, the smaller pipe will have more interest than the bigger.
