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Answer:
The current stock price is $21.54
Explanation:
The current price of the share of Knightmare Inc is the present value of all future cash flows receivable from owning stake in the company.
The future cash flows in this sense are the dividends payable by the company in years 1,2 and 3 which are $6.15,$9.05 and $12.25 per share respectively.
The discount factor in this case is given as 1/(1+r)^N where r is the required rate of return of 11.7% and the relevant year of dividend receipt,hence the share price is computed thus:
Year cash flow discount factor PV
1 $6.15 1/(1+11.7%)^1=0.89525 $5.5
2 $9.05 1/(1+11.7%)^2=0.80148 $7,25
3 $12.25 1/(1+11.7%)^3=0.71753 $8.79
Total present value $21.54
Answer:
b. exit barriers are high
Explanation:
Declining industries are those industries wherein the industry has saturated and experiences a negative growth. The characteristic of such industries being the products are lesser in demand.
For instance, cassettes and magnetic tapes industry was in demand until the arrival of more advanced forms such as compact discs and usbs, post which those industries turned into declining industries.
A declining industry with high barriers to exit would experience a greater competition since the barriers would encourage competition instead of withdrawal. And with higher costs of withdrawal, the firms continue producing at negative growth.
Answer:
The amount of overhead applied to Job T687 is closest to: $280.
Explanation:
Predetermined rate = Budgeted Overheads / Budget Activity
= $ 425,600 / 30,400
= $14.00 per machine-hour
Applied overheads to job T687 = Predetermined rate × Actual machine hours used
= $14.00 × 20
= $280
Conclusion :
The amount of overhead applied to Job T687 is closest to: $280.
