Answer and Explanation:
The computation is shown below:
a. The current stock price is
As we know that
Current stock price = (Dividend) ÷ (Required rate of return - growth rate)
= ($8) ÷ ( 10% - 5%)
= $160
b. Now the value of the ROE on the firm’s investment opportunities is
Given that
Dividend = $8
And,
The payout ratio = Dividend ÷ Earning per share
= $8 ÷ $12
= 0.666666666666667
And, retention ratio (b) is
= 1- 0.666666666666667
= 0.333333333333333
In addition to it
indefinite growth rate (g) = 5%
So, the ROE is
= Growth rate ÷ retention ratio
= 0.15 ÷ 0.3333
= 15%
c. And, the market paying per share is
PVGO = Price - Earning per share ÷ required rate of return
where,
PVGO = Present Value of Growth Opportunity
So, the market paying per share is
= $160 - $12 ÷ 10%
= $160 - $120
= $40
Answer:
X is 7.75%
Explanation:
The yield on a stock is determined by dividend and stock appreciation in the market.
First, we need to calculate the effective annual yield
Effective annual yield = ( 1 + Nominal interest rate/periods per year )^numbers of compounding periods annually - 1
Effective annual yield = ( 1 + 10%/2 )^2 - 1
Effective annual yield = 1.1025 - 1
Effective annual yield = 0.1025
Effective annual yield = 10.25%
Now use the following formula to calculate the X
Price of the share = Expected dividend / ( Effective annual yield - Growth rate )
Where
Price of share = 80
Expected Dividend = 2
Effective annual yield = 10.25%
Growth rate = X
Placing values in the formula
80 = 2 / ( 10.25% - X )
0.1025 - X = 2 / 80
0.1025 - X = 0.025
-X = 0.025 - 0.1025
-X = -0.0775
X = 0.0775
X = 7.75%
Answer: reflexivity
Explanation: In simple words, reflexivity refers to the ability of an individual to change its way of performing operations in its job as per the changing situations and needs.
Reflexivity helps an organisation to operate its business in constantly changing internal and external environment. At individual level it helps an employee to grow continuously as a reflexive individual will always be able to achieve their targets.
Hence from the above we can conclude that manager is trying to persuade his subordinates to be reflexive and adjust their purposes.
Can change
Hope this helps :)
Answer: $85,000
Explanation:
Find out the cost of per unit of inventory under absorption costing:
= Direct materials + Direct labor + Variable overhead + Fixed overhead per unit
= 4 + 2 + 3 + 160,000 / 20,000 units
= 4 + 2 + 3 + 8
= $17 per unit
If 5,000 units are left, the value of those units are:
= 5,000 * 17
= $85,000