Answer:
D1 = $3.50
D2 = $3.50
D3 = $3.50
Ke = 10% = 0.1
Po = <u>D1</u> + <u>D2</u> + <u>D3
</u>
(1+ke) (1+ke)2 (1+ke)3
Po = <u>$3.50</u> + <u>$3.50</u> + <u>$3.50
</u>
(1+0.1) (1+0.1)2 (1+0.1)3
Po = $3.18 + $2.89 + $2.63
Po = $8.70
None of the above
Explanation:
In this scenario, we need to discount the dividend in each year by the required at rate of return of 10%. The aggregate of the price obtained as a result of discounting in year 1 to year 3 gives the current market price.
The answer is D. 10-20 seconds.
Answer: $186,000
Explanation:
January is the 2nd month from November which means that all of November's $31,000 will be collected in January.
January is the first month after December so 30% of December sales should be collected in January. 50% has already been collected in December and this left $50,000.
Total credit sales in December must have been:
= 50,000 / 50%
= $100,000
Amount to be collected in January for December:
= 100,000 * 30%
= $30,000
Amount to be collected from January credit sales:
= 50% * 150,000
= $75,000
January cash sales = $50,000
Total cash in January :
= 31,000 + 30,000 + 75,000 + 50,000
= $186,000
Answer:
A. $900
Explanation:
Section 351 states that no gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person or persons are in control (as defined in section 368(c)) of the corporation. Therefore, Rachelle's tax basis in the stock received in the exchange equals to the sum of the stock's fair market value of $750, $50 in cash, and the liability of $100 that the corporation credited into their book.
