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Readme [11.4K]
3 years ago
12

The Jameson Company just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 5.50% p

er year in the future. The company's beta is 1.15, the market risk premium is 5.00%, and the risk-free rate is 4.00%. What is Jameson's current stock price, P0?a. $18.62b. $19.08c. $19.56d. $20.05e. $20.55
Business
1 answer:
jok3333 [9.3K]3 years ago
5 0

Answer:

Current price of the stock of Jameson company is $18.62. Therefore, the correct option is A

Explanation:

The formula of required rate of return is:

Required rate of return = Risk free rate + Beta × Market risk premium

= 4% + 1.15 × 5%

= 4%  5.75%

= 9.75%

Computation of current stock price is:

Current stock price = Expected dividend per share / (Required rate of return - Growth in dividend)

= (0.75 + [5.50% × 0.75] ) / (0.0975 - 0.055)

= 0.79125 / 0.0425

= $18.62

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Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning
wolverine [178]

Answer:

$6.7 per direct labor hour

Explanation:

Given:

Direct labor-hours = 20,000

Fixed manufacturing overhead cost = $94,000

variable manufacturing overhead = $2.00 per direct labor-hour

Actual manufacturing overhead cost for the year = $123,900

Actual total direct labor = 21,000 hours

Now,

Total Estimated Manufacturing Overhead

= 94000 + ( 2 × 20000 )

= $134,000

And,

Predetremined Overhead Rate = \frac{\textup{Estimated Maufacturing Overhead}}{\textup{Estimated Direct Labor Hours.}}

or

Predetremined Overhead Rate = \frac{\textup{134,000}}{\textup{20000}}

or

Predetremined Overhead Rate = $6.7 per direct labor hour

5 0
3 years ago
A company has an unfavorable direct materials quantity variance. A possible reason for this variance is that:
ycow [4]

Answer:

e. any of the other answers can occur.

Explanation:

The reason for the decision above is variances are not dependent on the direct material quantity variance and the calculation of all is differ. We also know the total direct material variance is total of material quantity & price variance that is because total variance may be favorable or unfavorable. And the option(d) direct labor efficiency variance do not relate with material variance.

7 0
3 years ago
Warner Company purchases $50,000 of raw materials on account, and it incurs $60,000 of factory labor costs. Supporting records s
andriy [413]

Answer:

WIP Assembly  DEBIT 24,000

WIP Finishing   DEBIT 26,000

Raw materials Inventory CREDIT 50,000

WIP Assembly  DEBIT 35,000

WIP Finishing   DEBIT 25,000

    Wages Payable CREDIT 60,000

Explanation:

Our first goal is to calculate the diference to get the finishing values

50,000 raw materials

assembly 24,000

50,000 - 24,000 = 26,000

Finishing 26,000

60,000 labor cost

Assembly 35,000

60,000 - 35,000 = 25,000

Finishing 25,000

Now we proceed to do the entries:

WIP Assembly  DEBIT 24,000

WIP Finishing   DEBIT 26,000

Raw materials Inventory CREDIT 50,000

WIP Assembly  DEBIT 35,000

WIP Finishing   DEBIT 25,000

    Wages Payable CREDIT 60,000

<u>Important:</u> There is no information about a finished goods or transfer from one process to another, so we should assume both are still in progress and no transfer to either one or finished goods were made.

So the values are transfer to the WIP of each department.

4 0
3 years ago
A government is torn between selling annual pollution allowances and setting an annual pollution tax. Unlike in the messy real w
elena-14-01-66 [18.8K]

Answer: Both will raise the same amount

Explanation:

The government here is certain that it can achieve the same quantity and price regardless of if it uses a pollution tax or pollution allowance. This means that it would be charging the companies the same regardless of the method used.

Both methods would therefore yield the same amount if the government uses either of them.

3 0
2 years ago
Repost because it got lost in a sea of questions)
saveliy_v [14]

Answer:

YESSSSSS

Explanation:

3 0
3 years ago
Read 2 more answers
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