Answer:
the margin of safety in dollars is $1,236,200
Explanation:
The computation of the margin of safety in dollars is shown below:
= Total sales - break even sales
= (41,200 units - 32,370 units) × $140 per unit
= $1,236,200
We simply deduct the break even sales from the total sales so that the margin of safety in dollars come
Hence, the margin of safety in dollars is $1,236,200
Answer:
Explanation:
a.)
Dividend discount model(DDM) is used to determine the price of a stock.
The formula is as follows;
Price ;P0 = D1 /(r-g)
D1 = Dividend in year 1
r = capitalization rate or required rate of return
g = dividend growth rate
P0 = 8/( 0.10-0.05)
P0 = 160.
The price of the Fi corporation's stock is therefore $160.
b.)
Use the formula that shows the relationship between ROE , retention rate and growth rate. It's as follows;
g = ROE *b
g = growth rate
b = retention rate
Given Earnings per Share (EPS) = $12 and dividend = $8, find dividend payout ratio first.
retention ratio = (1 -dividend payout ratio)
dividend payout ratio = 8/12 = 0.667 or 66.7%
retention ratio ; b = (1 -0.667)
b = 0.333 or 33.3%
Plug it in the formula;
0.05 = ROE * 0.333
ROE = 0.05/0.333
ROE = 0.15 or 15%
c.)
This question is asking for the Present Value of Growth Opportunity (PVGO)
The formula is as follows;
PVGO = Price - EPS1 /r
Price = $160 (from part a)
Expected earnings per share (EPS) = $12
required rate of return(capitalization rate) ; r = 10% or 0.10 as a decimal
PVGO = 160 - 12/0.10
PVGO = 160 -120
PVGO = $40
Therefore, the market is paying $40 per share for growth opportunities.
You can start a business no matter what by being smart, and think before you act... my business is being a YouTuber
Answer:
<u>Part a</u>
Incremental Sales = New Sale - Lost sales of Actual Pizza
Incremental Sales = 21,000,000 - (40% × 21,000,000)
Incremental Sales = $ 12,600,000
Thus the incremental sales connected in introducing of the new pizza is $12.6 Million.
<u></u>
<u>Part b</u>
Incremental Sales = New Sale - Lost Sales from Customer switching Brand
Incremental Sales = 21,000,000 - [42% × (40%) × (21,000,000)
Incremental Sales = 21,000,000 - 3528000
Incremental Sales = $17,472,000
Therefore, the incremental sales linked to introduce the new brand pizza in case (b) is $17.472 Million.
In the context of the Weberian model of the U.S. class structure, Kevin most likely belongs to the
<h3>
What is Class Structure?</h3>
This refers to the different social classes in which a person belongs to based on his contributions to society and other factors which includes work hours and paycheck.
With this in mind, based on the fact that Kevin is a clerk and earns around $40,000 yearly, and has basic literacy skills, then we can categorize Kevin as a working class man.
Read more about class structure here:
brainly.com/question/26329893
