Answer:
$8.78
Explanation:
National advertising made dividend payment of $0.75 per share
The dividend is expected to grow at a constant rate of 6.50%
= 6.50/100
= 0.065
The company beta is 1.85
The required return on the market is 10.50%
The risk free rate is 4.50%
The first step is to calculate the rate of return using the CAMP model
R = Risk free rate+beta(market return-risk free rate)
= 4.50%+1.85(10.50%-4.50%)
= 4.50%+1.85×6%
= 4.50%+11.1
= 15.6
Required rate of return= 15.6
Therefore the current stock price can be calculated as follows
Po= Do(1+g)/(r-g)
Where Do= 0.75, g= 0.065, r= 15.6
Po= 0.75(1+0.065)/(0.156-0.065)
Po= 0.75(1.065)/0.091
Po= 0.7987/0.091
Po= $8.78
Hence the company current stock price is $8.78
Answer:
PV= $81,947.83
Explanation:
Giving the following information:
Future value= $95,000
Interest rate= 0.03
Number of periods= 5
To calculate the initial investment required to reach the objective, we need to use the following formula:
PV= FV/(1+i)^n
PV= 95,000/(1.03^5)
PV= $81,947.83
Answer:
27 days
Explanation:
The accrued interest is calculated by beginning the count of days from the dated date of the corporate bond up until the settlement, without including the settlement date.
From 1st June to 27th June, a day before settlement date makes 27 days, as a result, the number of days in respect of which interest is owed to the underwriter is 27 days
Answer:
The answer is D. All of the above are plausible
Explanation:
A. Opportunity costs are relatively low is reasonable because as football game is taking place, most of the local people will go to the field to enjoy the field rather than spending their time at local shops/restaurants. Moreover, there are not many people from other towns visiting these facilities because of far distance.
B. is reasonable because it is high school football not professional football so the expenses spent on watching the game is low.
C. is is plausible because these towns are quite remote so watching their young neighbors/relatives playing may be one of the few entertainment choices available to them in weekend.
=> So, the answer is D.
Answer:
$69,000
Explanation:
Percentage of shares owned by ABC in Teal's company = 30%
This is an example of equity method investment , and a portion of the attributable income at the end of the year is earned and added to the initial stock.
Attributable income is the remaining income after dividends have been settled.
<u>Workings</u>
The opening carrying value of the shares on ABC balance sheet = 60,000
Profit made at the end of the period = 40,000
Dividends paid = 10,000
Attributable income to share holders = 40000-10000 = 30,000
ABC portion of attributable profit = 30000*30% = 9,000
Carrying value at the end of the year = opening carrying value + portion of the attributable profit
=60000+9000=69000
