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lana66690 [7]
3 years ago
9

January 1, 2016, Karev Corporation granted options to purchase 5,300 of its common shares at $6 each. The market price of common

stock was $11 per share on March 31, 2016, and averaged $11 per share during the quarter then ended. There was no change in the 71,105 shares of outstanding common stock during the quarter ended March 31, 2016. Net income for the quarter was $120,805. The diluted earnings per share for the quarter is $_____________ (Round your answer 2 decimal places
Business
1 answer:
sergey [27]3 years ago
8 0

Answer:

$1.64 per share

Explanation:

The computation of Number of Shares for computing Diluted Earning per share is shown below:-

Proceeds expected = 5,300 × $6

= $31,800

No. of Shares re-purchased = $31,800 ÷ $11

= $2,891 (rounded)

Net Effect of Stock Option = 5,300 - $2,891

= 2,409 shares

Number of Shares for computing Diluted Earning per share = Outstanding shares + Net Effect of Stock Option

= 71,105 + 2,409

= 73,514

Diluted earnings per share for the quarter = Net income for the quarter ÷ Number of Shares for computing Diluted Earning per share

= $120,805 ÷ 73,514

= $1.64 per share

So, for computing the Number of Shares for computing Diluted Earning per share we simply applied the above formula.

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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
2 years ago
A company pursuing vertical integration can gain market power over its competitors through all of the following EXCEPT: a. avoid
Helen [10]

Answer:

B. Improved adjustment to technological changes.

Explanation:

Vertical Integration: It is a strategy to gain competitive advantage by taking complete control over a few stages of production or distribution. The company implements vertical integration to reduce the cost of production, reduce dependence on others, improve the quality of the product, etc.

In the given case, the company pursuing vertical integration can gain market power over its competitors through improved quality, reduction in cost, and reduction in operation cost, however, it does not improve adjustment to technological changes.

3 0
3 years ago
Talks-A-Lot, Inc. sells cell phones to customers and expects that 10% of phones sold will be returned for repair under its warra
Gnom [1K]

Answer:

Product warrant liability to be reported as on 31.12.2021* is $3.124

<em>*The procedures are attached in a microsof excel document. </em>

Explanation:

This amount will be recognized as a liability only if product warranty amount can be rmeasured reliabily and there is probability that there will be an outflow of funds.

Download xlsx
6 0
3 years ago
The balances in Sanchez Accounting Services' office supplies account on February 1 and February 28 were $1,100 and $475, respect
Hitman42 [59]

Answer:

$575

Explanation:

Given that,

Opening office supplies = $1,100

Closing office supplies = $475

Office supplies expense for the month = $1,200

Opening stock + Purchases - Closing stock = Consumption

$1,100 + Purchases - $475 = $1,200

$625 + Purchases = $1,200

Purchases = $1,200 - $625

                  = $575

Therefore, the amount of office supplies was purchased during February is $575.

7 0
2 years ago
A company has an opening stock of 6,000 units of output. The production planned for the current period is 24,000 units and expec
Orlov [11]

Answer:

Explanation:

                                                Last year           Current year

Selling Price                      10                         10

Varaible Price                5                         6

Contribution Margin               5                               4

Break even is the point where total cost is equal to total revenue mean no profit and loss.

company earns the contribution margin after covering the variable cost, now only fix cost remains for break even.

Break Even using FIFO method :  first In first out system

Fix Cost                                                                            =     86000

contribution from opening units(6000*5)                            =     30000

Remaining Fix cost that should be Covered from

current year products                                                            =     56000

 

Units to be sold for break-even ( 56000/4)   = 14000

so we have break even units   6000+14000 = 20000

Fix cost                              = -86000

Opening 6000*5              = 30000

Current   14000*4             = 56000

Profit                                   = 0

Break Even using LIFO method : Last in first out

Fix Cost                                                                            =     86000

Break even =  Fix Cost / Contribution margin

Break even =  86000/4 =21500

current production is 24000 which is higher than break even units so we can cover the fix cost from current year production because company is using lifo method. we do not need opening units for the break even.

4 0
3 years ago
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