Answer:
(a) $10 million
(b) $1 per share
(c) $49
(d) 25 %
Explanation:
(a) Estimated net earnings for next year.
Sales next year = $100 million
Net profit margin = 10%
Net profit margin = Net Income ÷ Sales
Net Income = 10% × $100 million
= $10 mil
lion
(b) Next year's dividends per share.
Dividend payout = Dividends paid ÷ Net Income
= 50%
Dividends paid = $10 × 50%
= $5 mil
lion
Per share dividend = Dividend paid ÷ Shares outstanding
= $5 million ÷ 5 million
= $1 per share
(c) The expected price of the stock (assuming the P/E ratio is 24.5 times earnings).
Earnings per share:
= Net income ÷ shares outstanding
= $10 million ÷ 5 million
= $2 per share
P/E Ratio = Price per share ÷ Earnings per share
Price per share = $2 × 24.5
= $49
(d) The expected holding period return (latest stock price: $40 per share).
= (Final price - Initial price + Dividend) ÷Initial Price
= ($49 - $40 + $1) ÷ $40
= 25%
Answer:
The CPA rebuts the allegations
Explanation:
The Securities Act of 1933 requires that investors receive financial and other significant information regarding any and all securities being sold publicly and prohibits deceit, misrepresentations, and other fraud in the sale of securities. Therefore, since there was material misstatement or omission in the financial statements, the only chance the CPA has is if they rebut the allegations. Meaning that they provide actual evidence, such as physical statements or witnesses that contradict or nullify the evidence that is being presented against them regarding the material misstatement or omission
Answer:
a. middle manager.
Explanation:
In this scenario, Bobby is the plant manager of one of the three manufacturing plants of a paper manufacturing company. He is responsible for synching the processes of his plant with the standards set at the company's headquarters. He sends weekly updates of raw material requirements to the purchase division at the headquarters. He also connects the company's human resources department with the employees who work in his plant. In this scenario, Bobby is most likely a middle manager.
A middle manager refers to an individual who acts as an intermediary between the executive management and the employee working with the company.
Answer: c. A nonagency relationship with everyone in the office.
Explanation:
For an agency relationship to exist in the eyes of the law, there must be a contract with a written designated agency relationship between the client and Meramac Realty.
With no such contract in existence, the law recognizes no agency relationship between Meramac and any of its affiliates with the client. There is therefore a non-agency relationship with everyone in Meramac.
The field of economics is so vast and broad that it is often classified into branches and one of which are the positive and normative economics. Positive economics usually refers to the process and methods of explaining a certain economic phenomenon in which it establishes common relationships among variables present.
