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Vadim26 [7]
3 years ago
13

Three Corners Markets paid an annual dividend of $1.42 a share last month. Today, the company announced that future dividends wi

ll be increasing by 1.3 percent annually. If you require a return of 14.6 percent, how much are you willing to pay to purchase one share of this stock today?
A) $10.68
B) $10.82
C) $9.68
D) $11.23
E) $11.57
Business
1 answer:
miv72 [106K]3 years ago
8 0

Answer:

$10.82

Explanation:

The computation of one share of stock is shown below:-

Expected dividend = Annual dividend × (1 + Growth rate)

= $1.42 × (1 + 1.3%)

= $1.42 × 1.013

= $1.44

Stock value = Expected dividend ÷ (Required return - Growth rate)

= $1.44 ÷ (14.6% - 1.3%)

= $1.44 ÷ 13.30%

=  $10.82

Therefore for computing the stock value we simply applied the above formula.

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Western Wear has total sales of $642,100, EBIT of $93,900, net income of $50,800, current assets of $153,500, total assets of $6
Shtirlitz [24]

Answer:

The values of the three components of the DuPont identity are Profit Margin =  7.91 %, Total Assets Turnover = 0.98 and Rate of return on asset = 7.75 %

Explanation:

The DuPont identity was developed by managers for evaluating performance. The DuPont identity shows how the return on equity is affected  asset turnover, the profit margin and leverage.

The Profit margin times the total assets turnover is called the Du Pont equation and it gives the Rate of return on asset (ROA).

ROA = Profit Margin x Total assets turnover

where,

Profit Margin = Net Income ÷ Sales

                       = $50,800 ÷ $642,100

                       = 7.91 %

Total Assets Turnover = Sales ÷ Total Assets

                                      = $642,100 ÷ $658,000

                                      = 0.98

therefore,

ROA = 7.91 % x 0.98 = 7.75 %

Conclusion

The values of the three components of the DuPont identity are Profit Margin =  7.91 %, Total Assets Turnover = 0.98 and Rate of return on asset = 7.75 %

5 0
3 years ago
Average maintenance costs are $1.50 per machine-hour at an activity level of 8,000 machine-hours and $1.20 per machine-hour at a
Orlov [11]

We solve this problem by assuming that the relation is linear. With that, the slope m must be constant with x = machine hours and y = average maintenance costs, therefore

m = (13,000 – 8,000) / ($1.20 - $1.50) = (13,000 – 10,000) / ($1.20 – X)

($1.20 – X) = ($1.20 - $1.50) * (13,000 – 10,000) / (13,000 – 8,000)

$1.20 – X = - $0.30 * 3,000 / 5,000

$1.20 – X = - 0.18

X = $1.38

Therefore total expected maintenance cost is:

Total maintenance cost = $1.38 * 10,000

Total maintenance cost = $13,800

<span>Therefore the answer is closest to the value of $13,440.</span>

3 0
3 years ago
Do i need a LLC for a lipgloss business
zaharov [31]

Answer:

No, you do not.

Explanation:

6 0
2 years ago
The idea that the money supply does not affect real economic variables is called:________
Sergio [31]

Answer:

The correct answer is letter "B": monetary neutrality.

Explanation:

Austrian economist Friedrich A. Hayek (1899-1992) referred to monetary neutrality as a theory that states the changes in the money supply do not affect the <em>prices of goods, services, wages but no the economy as a whole</em>. According to Hayek, printing more money could increase the demand affecting some economic variables (such as the mentioned above), but in the long run, it does not have a relevant impact.

3 0
3 years ago
What is the primary reason that so many new businesses fail??
morpeh [17]
The reason why business fail is because they find it extremely hard to compete with the well known business. for example a man that opens up a buisiness that sells soap and decides to name the soap and company labbi but everyone goes to dove because it's more well known and been out for years and delivers high quality 
3 0
3 years ago
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