Answer:
$31.57 per share
Explanation:
Terminal Value (TV) = CF5(1 + g) / (Ke – g)
= $72,500*(1 + 0.0160) / (0.1540-0.0160)
= $73,660 / 0.1380
= $533,768
Year Cash Flow PVF at 15.40% PV of Free Cash Flow
1 48,200 0.866551 41,768
2 57,900 0.750911 43,478
3 71,300 0.650703 46,395
4 72,500 0.563867 40,880
4 533,768 0.563867 <u>300,974</u>
TOTAL <u>473,495</u>
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The current value per share of stock = Total Present value of future cash flows / Number of shares outstanding
= $473,495 / 15,000 shares outstanding
= $31.57 per share
Using monetary policy, more specifically short-term interest rates, if the economy is facing a recessionary gap, we will decrease the interest rate and increase the aggregate demand.
What is Monetary policy?
The central bank's macroeconomic policy is known as monetary policy. It is a demand-side economic strategy used by a nation's government to achieve macroeconomic goals including inflation, consumption, growth, and liquidity. It involves managing the money supply and interest rate.
The decisions made by central banks to affect the cost and accessibility of money in an economy are known as monetary policy. Interest rate changes and adjustments to bank reserve requirements are examples of monetary policy strategies. The Federal Reserve frequently employs the discount rate, open market operations, and reserve requirements as its three primary monetary policy tools.
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Answer:
C) 10.92 years worth of payments
Explanation:
Complete Question:
The O'Hara, Parness, and Lincoln partnership balance sheet reports capital of $50,000 for O'Hara, $125,000, for Parness, and $25,000 for Lincoln. O'Hara is withdrawing from the firm. The partners have shared profits and losses in the ratio of 1/2 to O'Hara, 1/4 to Parness, and 1/4 to Lincoln. The partnership agreement states that a withdrawing partner will receive cash equal to the book value of his partners' equity. Journalize the withdrawal of O'Hara.
Answer:
The O'Hara, Parness, and Lincoln Partnership
Journal Entry:
Date Description Debit Credit
O'Hara Capital A/c $50,000
Cash Account $50,000
To record the withdrawal of O'Hara and his capital interest.
Explanation:
The Partnership of O'Hara, Parness, and Lincoln can use the journal entry as above to record the withdrawal of a partner. The O'Hara's Capital account previously had a credit balance and cash will be involved in settling O'Hara, the journal entries to complete the withdrawal of O'Hara are a debit to the O'Hara's Capital account and a credit to the Cash account. This arrangement is in accordance with the partnership agreement. This is the most important governing law for the partnership and everything or transaction affecting the partnership must be done accordingly. It is only in the absence of an agreement that the laws or general practise concerning partnership can be applied.