That statement is false.
Economic theories will determine how companies see the market and will somehow affect the decision that they will make for the market.
This decision will influence the future economic trends because these companies usually are really forward thinkers. From this, we could draw a correlation between future economic trends and economic theories
Answer:
Campus Stop, Inc.
Partial Income Statement
Sales revenue $323,300
Sales returns ($1,730)
Sales discounts and allowances <u> ($2,270)</u>
Net sales $319,300
Cost of goods sold <u>($172,870)</u>
Gross profit $146,430
Gross profit margin = $146,430 / $319,300 = 45.86%
Answer
Retained earnings at the beginning of Year 2 was: $1,450
Explanation
Revenue = $2,100
Retained Earnings Closing Balance = $1,850
Expenses = $1,150
Dividends = $550
Retained Earnings Closing Balance = Revenue - Expenses - Dividends + Retained Earning Beginning Balance
$1,850 = $2,100 - $1,150 - $550 + Retained Earning Beginning Balance
Retained Earning Beginning Balance = $1,450
Answer:
Maximum price to be paid for the stock = $12.43
Explanation:
The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.
<em>Hence the value of the stock would be the present value of its future dividend discounted at 15%</em>
Year PV of dividend
1 8 ×1.15^(-1)
2 4 × 1.15^(-2)
3. 2 × 1.15^(-3)
4 2 × 1.15^(-4)
PV of dividend = (8 ×1.15^-1) + (4 × 1.15^-2) + (2 × 1.15^ -3) + (2× 1.15^-4) = 12.439
Maximum price to be paid for the stock = $12.43
