Answer:
Journal Entry
Dr. Contingent Consideration Liability $500,000
Cr. Goodwill $500,000
Explanation:
It is assumed that the decline in the fair value is the correction of the acquisition entry. It means due to this event the consideration liability and goodwill are overstated we need to rectify the balances.
Hence,
The contingent consideration liability will be debited to reduce the liability and goodwill will also be decreased by crediting the goodwill account.
Price elasticity of demand is defined by Change in Quantity demanded / Change in Price.
Tom ordered 10 gallons of gas without asking about the price. This means that no matter the price, Tom orders the same quantity of gas (quantity demanded does not change with price). His demand is perfectly inelastic, or 0.
Jerry orders $10 worth of gas. This means that no matter how much it gives him, Jerry will pay $10. The price elasticity of demand depends on how much the price changes by.
For example, if price doubles from $5/gal to $10/gal, demand falls by 50% (2 gallons to 1 gallon), making his price elasticity -0.5
If the price increase 10% from $10/gal to $10.10/gal, demand falls 1% from 1 gal to .99 gallons, making his price elasticity -0.1
Answer:
Market price: 28.90
Explanation:
We will calculate the stock price using the gordon dividend grow model:
D1 = 1.25
grow = g = 6% = 6/100 = 0.06
return= for the return, based on the information give, we will calculate it using the CAPM model:
risk free = 0.04
premium market=(market rate - risk free)= 0.055
beta(non diversifiable risk)= 1.15
Ke =cost of capital = return in the dividend grow formula = 0.10325
Now, we calculate the stock price:
Stock: 28.9017341
Market price: 28.90
Cube c. Is ur answer I did this not long ago it’s very easy try and learn it.