Effective teamwork and high productivity are good indications of positive....

The last dividend paid by Wilden Corporation was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years,

shtirl [24]

Answer:

e) $37.05

Explanation:

Using the dividend growth model, the value of a stock is the present value of the future dividends receivable discounted at the required rate of return . The required rate of return is given as 12%.

So we discount the year 3 dividend using the dividend growth model formula

P = D (1+g)/r-g

r- rate of return, g = growth rate

Present value of the future dividends:

PV of Year 1 = 1.55(1.015)m × 1.12^(-1)

= 1.4047

PV of Year 2 = 1.55 (1.015)(1.015) × 1.12^(-2)

= 1.27

PV of Year 3 (this will be done in two steps)

Step 1; PV (in yr 2) of year 3 dividend

= (1.55)(1.015)^2×(1.08)/(0.12-0.08)

=43.114

Step 2 : PV (in yr 2) of year 3 dividend

=43.114 × (1.12^(-2))

= 34.37

Best estimate of stock = 1.40 + 1.27 +34.37

= $37.05

Note

To discount the year 3 dividend, we use two steps. The first stp helps get the PV in year 2, and step 3 helps to take it further to the PV in year 0

8 0

3 years ago

EZ-Tax is a tax accounting practice with partners and staff members. Each billable hour of partner time has a $800 budgeted pric

Harlamova29_29 [7]

Answer:

EZ-Tax

Partner Staff Total

a. Sales price variance $104,000 ($110,000) ($6,000) U

b. Activity variance $160,000 $420,000 $580,000 F

c. Mix variance $85,000 $180,000 $265,000 F

d. Quantity variance $189,000 $70,000 $259,000 F

Explanation:

a) Data and Calculations:

Partner Staff

Budgeted billable rate per hour $800 $210

Budgeted variable cost per hour 375 120

Budgeted billable hours 5,000 20,000

Budgeted revenue $4,000,000 $4,200,000

Budgeted variable cost 1,875,000 2,400,000

Actual revenue $4,264,000 $4,510,000

Actual billable hours 5,200 22,000

Actual billable rate per hour $820 $205

Budgeted billable rate per hour $800 $210

Variance in price $20 ($5)

Sales price variance $104,000 ($110,000) ($6,000)

Sales price variance = (Standard price - Actual price) * Actual billable hours

= ($800 - $820) * 5,200 + ($210 - $205) * 22,000

= $20 * 5,200 + ($5) * 22,000

= $104,000 - 110,000

= $6,000 U

Activity variance = (Actual billable hours - Standard billable hours) * Standard rate

= (5,200 - 5,000) * $800 + (22,000 - 20,000) * $210

= (200 * $800) + (2,000 * 210)

= $160,000 + 420,000

= $580,000 F

Partner Staff Total

Budgeted revenue $4,000,000 $4,200,000 $8,200,000

Budgeted variable cost 1,875,000 2,400,000 4,275,000

Budgeted contribution $2,125,000 $1,800,000 $3,925,000

Actual revenue $4,264,000 $4,510,000 $8,774,000

Actual variable cost 1,950,000 2,640,000 4,590,000

Actual contribution $2,314,000 $1,870,000 $4,184,000

Quantity variance $189,000 $70,000 $259,000

Quantity variance = Budgeted contribution - Actual contribution

= $3,925,000 - $4,184,000

= $259,000 F

Mix Variance:

Standard contribution margin $425 $90

Volume variance 200 2,000

Mix variance = $85,000 $180,000

3 0

2 years ago

Several months after the reorganization, Jim Umpleby checks in with department managers to see how their employees are handling

Nat2105 [25]

Answer:

The correct answer would be options A and B.

Explanation:

When a company is in financial trouble or faced a bankruptcy, then a process of reorganization is used in an attempt to extend the life of the company through some special arrangement to make the organization successful and progressive.

In this question, Jim wants to know how employees of the company think of the new structure after the reorganization. So the best method to talk to employees directly is to give them a surprise visit and talk to them about the reorganization. Also town hall meetings should be arranged to meet the employees one on one in an informal gathering and talk to them about the reorganization.

6 0

3 years ago

Suppose an American buys stock issued by an Argentinian corporation. The Argentinian firm uses the proceeds from the sale to bui

faltersainse [42]

Answer:

Policies consistent with the goal of increasing productivity and growth in developing countries are:

1. Protecting property rights and enforcing contracts

2. Providing tax breaks and patents for firms that pursue research and development in health and sciences

Explanation:

To increase productivity and growth in developing countries, it is important that developing countries enhance the mechanisms for protecting property rights and enforcing contracts. These are the bases for attracting more foreign direct investments. The court system should be a system where justice is obtained and a system which can enforce the rights of individuals to own property. Without this basic ingredient, foreign direct investments will be hard to attract.

4 0

3 years ago

Fernandez Company had an accounts receivable balance of $150,000 on December 31, Year 2 and $175,000 on December 31, Year 3.

Mars2501 [29]

Answer:

The amount collected from customers on accounts receivable during year 3 is $535,000.

Explanation:

Cash received from accounts receivable = Opening balance of AR + Credit Sales - Bad debts written off - Closing balance of AR.

The opening balance for year 3 account receivables was 150000.
Credit Sales = 600000
Bad debts = 40000
Closing Balance = 175000

We can solve this question either by making a T account for accounts receivable or using the equation given above.

Cash = 150000 + 600000 - 40000 - 175000 = $535000

4 0

3 years ago

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