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ahrayia [7]
3 years ago
7

The Delta Manufacturing Company has a marginal tax rate of 21 %. The last dividend paid by Delta was $2.60. The expected long-ru

n growth rate is 4%. If investors require 11% rate of return, what is the current price of the stock (P0)?
Business
1 answer:
Musya8 [376]3 years ago
5 0

Answer:

The stock price is 38.63

Explanation:

We use the gordon model to calculate the horizon value and with htat the value of the stock:

\frac{D_1}{r-g} = PV\\\frac{D_0(1+g)}{r-g} = PV\\

D1 = 2.60 x 1.04 = 2.704

rate of return 11% = 0.11

grow rate = 4% = 0.04

\frac{2.704}{0.11-0.04} = PV\\

P0 = 38.62857143

The taxes should be ignored as the gordon model do not include them in the calculations

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it will help get into college.

Explanation:

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Veltri Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.77 direct labor
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Answer:

Total direct labor cost= $122,752

Explanation:

Giving the following information:

Each unit of output requires 0.77 direct labor-hours.

The direct labor rate is $11.20 per direct labor-hour.

Production budget:

October= 7,100 units

November= 6,900 units

Minimum hours= 5,480 hours

First, we need to determine the number of hours required for each month.

October= 7,100*0.77= 5,467 hours

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Direct labor budget:

October= 5,480*11.2= 61,376

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Total cost= $122,752

3 0
3 years ago
Grace wants to become a manager at the bank where she is currently a teller. Which of the following goals would be appropriate f
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One of the most important applications of ratio analysis is to compare a company's performance with that of other players in the
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Answer: a. percentage change analysis.

B. Blue Hamster Manufacturing Inc.’s ability to meet its debt obligations has improved since its debt-to-equity ratio decreased from 0.60 to 0.38.

D. A decline in the inventory turnover ratio could likely be explained by operational difficulties that the company faced, which led to duplicate orders placed to vendors

Explanation:

1. The analysis which has to do with the calculation of the growth rates of all items from balance sheet and the income statement which is relative to a base year is referred to as the percentage change analysis.

2. The statements that can be included in the analysis report from the question include:

• Blue Hamster Manufacturing Inc.’s ability to meet its debt obligations has improved since its debt-to-equity ratio decreased from 0.60 to 0.38

• A decline in the inventory turnover ratio could likely be explained by operational difficulties that the company faced, which led to duplicate orders placed to vendors.

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2 years ago
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