A firm wishes to maintain an internal growth rate of 8 percent and a dividend payout ratio of 36 percent. The current profit mar
1 answer:
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Answer:
Invnetory TurnOver 10
Average inventory 36.5
Explanation:
300,000 / 30,000 = 10
The company sales his inventory 10 times per year
In some cases, we are given with a beginning and ending inventory.
For those, we calculate the average inventory:
(beginning + ending)/2
365/10 = 36.5
The average the inventory age is 36.5 days
365 are the days of the year, and the inventory Turnover are the times per year the inventory is being sold.
we divide one fro manother to get a metric in days of how much the invneotry is in store before being sold.
Answer:
E. $41.69
Explanation:
We know,
Value of stock () =
[In case of constant growth model]
= Next year or expected dividend
= required rate of return
g = growth rate = 5.50%
However, as there is no information regarding expected dividend, we will use the alternative formula to calculate the stock's expected price 3 years from today.
=
×
Here, current stock price, = $35.50
Therefore, = $35.50 ×
= $35.50 × 1.1742
Stock's expected price 3 years from now = $41.69 (rounded to two decimal places)
Therefore, option E is the answer.