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Mamont248 [21]
3 years ago
14

LeBlanc Inc. currently has earnings of $10 per share, and investors expect that the earnings per share will grow by 3 percent pe

r year. Furthermore, the mean PE ratio of all other firms in the same industry as LeBlanc Inc. is 15. LeBlanc is expected to pay a dividend of $3 per share over the next four years, and an investor in LeBlanc requires a return of 12 percent. What is the forecasted stock price of LeBlanc in four years, using the adjusted dividend discount model?
Business
1 answer:
ki77a [65]3 years ago
8 0

Answer:

Stock Price of LeBlanc in four years = $37.517

Explanation:

Dividend Discount model is as follows:

P_4 = \frac{D_5}{K_e - g}

Where,

P_4 = Price of share at end of four years

D_5 = Dividend to be paid at end of 5th year

K_e = return on equity or cost of equity

g = growth rate

Now we have the information as follows:

Dividend at 5th year end = ((($3 per share + 3%) + 3%) + 3%) +3% = 3.765

Cost/ Return on equity = 12%

Growth rate = 3%

Therefore price = \frac{3.3765}{0.12 - 0.03}

= \frac{3.3765}{0.09}

Stock Price of LeBlanc in four years

= $37.517

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Herman Company has three products in its ending inventory. Specific per unit data at the end of the year for each of the product
jek_recluse [69]

Answer:

Product 1  - $36

Product 2 -  $ 96  

Product 3  -  $66

Explanation:

The accounting standard for Inventory under IFRS IAS 2 requires that inventory be recognized at cost which includes all the cost incurred to bring the item of inventory to a state or place where the item of inventory becomes available for sale.

These costs includes cost of purchase, freight, Insurance cost during transit etc.  

Subsequently, inventory is to be carried at the lower of cost or net realizable value.

The NRV is the Selling price less the cost to sell.

Given

                             Product 1       Product 2        Product 3

Cost                            $36              $ 106              $ 66

Selling price               $ 88              $ 168             $ 118

Costs to sell                $ 9                $ 72              $ 26

NRV                             $ 79               $ 96              $ 92

6 0
3 years ago
When a tariff is imposed, there is always an additional loss. One loss occurs when consumers purchase fewer units of the good be
Yakvenalex [24]

Answer:

The correct answer is Production loss.

Explanation:

The quantifiable cost associated with the interruption of the operation of a pump is low when compared to the cost throughout its useful life in an installation carried out in a commercial building. However, the loss of comfort suffered by users of the building makes it advisable to have a spare pump.

Unlike what happens in production processes, stopping a pump from a commercial building almost never results in a loss of production. On the contrary, the interruption is usually translated into a loss of comfort. However, the immeasurable costs associated with downtime may be even higher if, for example, hotel guests run out of water. Therefore, it is always advisable to install a replacement pump to prevent comfort losses caused by an unexpected failure in the pumping system. The communication capabilities of electronically controlled pumps E help minimize downtime because replacement and repair work can be completed more quickly in the event of a breakdown. A backup pump is used to prevent downtime and consequent loss of comfort in the event of a breakdown.

4 0
3 years ago
Fiscal policy refers toa.changes in the interest rate.b.changes in the money supply.c.changes in the amount of physical capital
myrzilka [38]

the answer is d. discretionary changes in government spending and taxes

5 0
3 years ago
Mark Crane purchased a $1,000 corporate bond five years ago for $1,055. The bond paid 7.0 percent annual interest. Five years la
lys-0071 [83]

Answer:

Mr Crane's total return on the bond investment was 5.35%

Explanation:

The return on a bond is also known as it yield to maturity (YTM). In order to find a bonds YTM we need to know its present value, future value, coupon payments and number of years. In this case the bond's present value is 1,055 because it was bought at this price, it's future value is 980 because it was sold for 980, its number of years was 5 as it was held for 5 years and its coupon payment was  (0.07*1000)=70. Now in order to compute return or ytm we need to put all these values in a financial calculator and compute I

PV= -1055

FV= 980

PMT= 70

N=5

Compute I=5.35

The return on the bond investment was 5.35%

6 0
3 years ago
A company's direction, objectives, and strategy Group of answer choices are set in stone as the end of the planning process. nev
STALIN [3.7K]

Answer:

are never final, as managing strategy is an on-going, dynamic process.

Explanation:

In Business management, a strategy can be defined as a set of guiding principles, actions and decisions that an organization combines so as to achieve its business goals, attract customers and possess a competitive advantage over its rivals in the industry.

Business strategy sets the overall direction for the business because it focuses on defining how a business would achieve its goals, objectives, and mission; as well as the funds and material resources required to implement or execute the business plan. The components of a business strategy includes the following;

I. Value.

II. Vision.

III. Mission.

Hence, a company's direction, objectives, and strategy are never final because managing strategy is a continuum or an on-going, dynamic process. Thus, it's never a now and then task.

6 0
3 years ago
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