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krok68 [10]
2 years ago
9

Can you breifly explain why stockholders' investment and revenues increase stockholders' equity, while dividends and expenses de

crease stockholders' equity.
Business
1 answer:
Scilla [17]2 years ago
5 0
From an accounting standpoint, stockholders' investment and revenues increase the assets of the company without adding to the liabilities. Therefore according to the equation (A = L + E), equity must increase.

Similarly, issuing dividends and paying expenses pays cash out of the company, which decreases assets without changing liabilities. Therefore equity must decrease.

Another way to think of it is: what contributes to the company's profit and/or value, and what decreases these things? Well, revenues and people investing in the company are good (and therefore good for stockholders), and giving cash out and paying expenses are costs to the company (and therefore decrease value for stockholders).
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If earnings are expected to grow at a constant rate over time of 0.03 and investors' rate of discount is constant at 0.04, and i
Usimov [2.4K]

Answer:

The answer is $15,656

Explanation:

Formular: P = D * \frac{1 + g}{k - g}

P represent estimated stock price or value = ?

D represent last dividend paid = $152

k represent discount rate = 0.04

g represent growth rate = 0.03

Using the fomular above; P = $152 * \frac{1 + 0.03}{0.04 - 0.03}

P = $152 * \frac{1.03}{0.01}

P = $152 * 103 = $15,656

:. The fundamental value of the stock market would be $15,656

7 0
3 years ago
1. What are the three stages in strategic management? Which stage is more analytical? Which relies most on empowerment to be suc
valkas [14]

Answer:

strategic management: strategy formulation, strategy implementation, and evaluation and control.

3 0
2 years ago
A web interface which represents integrated personalized business content delivered to senior managers is
Annette [7]

Answer:

Web portal

Explanation:

A web portal, simply called a portal, is a specifically designed website that provides specific and relevant information to its users. The information is accessed from a single interface. A portal serves as a reference point or a collection of categorized content.

In an organization, a web portal can be designed to present content relevant to senior managers only. The portal allows the senior managers to search, navigate and apply content relevant to their duties from a single interface point

3 0
2 years ago
Good Firm is highly profitable and will grow rapidly in the future. Bad Firm faces the same risks but barely makes a profit and
RideAnS [48]

Answer: B.both stocks are equally good investments

Explanation:

The options are;

A.it is better to buy shares in Bad Firm

B.both stocks are equally good investments

C.it is better to buy shares in Good Firm

D.both stock prices react equally to the same information

From the question, we are informed that Good Firm is highly profitable and will grow rapidly in the future while Bad Firm faces the same risks but barely makes a profit and will not grow at all. It should be noted that In an efficient market, both stocks are equally good investments.

3 0
3 years ago
A leasea) Must be for at least one yearb) Conveys the right of occupancy to anotherc) Must include the landlord paying the taxes
Y_Kistochka [10]

Answer:

b) Conveys the right of occupancy to another

Explanation:

A lease is an agreement made between a lessee and a lessor for using an asset. A lessee is a user who pays to the lessor who is the owner for any asset which can be a building, property or a vehicle. The lessee owns the right to use the asset by paying to the lessor for the fixed duration. Usually, the asset put into a lease are tangible but can be intangible too.

3 0
3 years ago
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