Answer: Ke = 8% = 0.08
ROE = 10% = 0.10
Expected EPS = $6
Plowback rate ( b) = 40% = 0.40
Dividend per share (D) = 60%x $6 = $3.60
Po = D(1+g )/ke-g
Po = $3.6(1+0.04)/0.08-0.04
Po = $3.744/0.04
Po = $93.60
The current market price is $93.60
The price-earnings ratio = market price per share/Earnings per share
= $93.6/$6
= 15.6
The correct answer is C
Explanation: The price-earnings ratio is the ratio of market price per share to earnings per share. In this scenario, it is important to obtain the market price per share using the above formula. Thereafter, the market price per share is divided by the earnings per share. There is need to calculate the dividend per share based on the retention rate of 40%. since the retention rate is 40%, the dividend pay-out rate will be 60%. Thus, dividend is 60% of the expected earnings per share. The estimation of growth rate (g) is based on Gordon's growth model, which is g = r x b. r represents return on equity while b denotes the plowback(retention rate).
Answer:
First mover; Late mover
Explanation:
In many cases companies who enter a market after innovative products have been introduced can achieve long-term competitive advantages by continuing to develop a better mousetrap. For example, VisiCalcwas the first company to introduce a desktop spreadsheet program but Lotus Notes cornered a large market share when it introduced the 1-2-3 program. Today, however, Microsoft's Excel is the dominant spreadsheet software program and has continued to endure due to the popularity of the Microsoft Office Suite of products. VisiCalc possessed a <u>First Mover</u> advantage while Microsoft enjoyed a <u>Late Mover</u> advantage.
First mover advantages: It is the marketing strategy of initiating any technique in the market to gain competitive advantages for being the first entrant with any new technique or technologies. It also helps in gaining brand recognition and market share.
Last mover advantages: It is another marketing strategy to gain competitive advantages by late introducing the product in the market after learning from the technique of competitors, it also helps in avoiding mistakes of rivals in the market.
In the given case, VisiCalc has enjoyed first-mover advantages as it was first one of its own type to be introduced in the market, however, Microsoft enjoyed last mover advantages as the consumer has found better and easier product than previous one, which was in the favor of Microsoft.
Answer:
The answer is D.
Explanation:
Yes, government is on demand side of both factor markets and goods market.
What are factor markets and goods markets? - Factor markets are markets im which one can buy factors of production like labour, capital while goods markets are market where one can buy goods and services.
Government demand for labour by employing its citizens to ministries, agencies and department and also demand for capital in the financial market. Government borrows money to meet its obligation. Therefore, government is on the demand side in factor market.
Also for goods markets, government buys equipment and infrastructure, employs the service of professionals. They are on the demand side for goods markets too.
Answer:
a. retained earnings of the seller are overstated
Explanation:
An asset transfer from a subsidiary to its parent at a gain is an Intragroup transaction. Intragroup transactions must be eliminated otherwise the financial statements would be misleading and not have a faithful representation.
The consequence of this transfer is that the Income of the Seller (subsidiary) increases and this also increases the Retained Income Balance of for the Subsequent years. We should eliminate this Income.
Answer:
12 weeks
Explanation:
Data:
Let the total amount be: = $ 1 817. 75
Deposit paid = $ 600
Amount remaining after deposit = 
= $ 1 217.75
Amount per week = $ 105.00
Therefore, the time taken to pay $ 1 217.75 = 
= 11.59
= 12 weeks
