Answer:
(a) $10 million
(b) $1 per share
(c) $49
(d) 25 %
Explanation:
(a) Estimated net earnings for next year.
Sales next year = $100 million
Net profit margin = 10%
Net profit margin = Net Income ÷ Sales
Net Income = 10% × $100 million
= $10 mil
lion
(b) Next year's dividends per share.
Dividend payout = Dividends paid ÷ Net Income
= 50%
Dividends paid = $10 × 50%
= $5 mil
lion
Per share dividend = Dividend paid ÷ Shares outstanding
= $5 million ÷ 5 million
= $1 per share
(c) The expected price of the stock (assuming the P/E ratio is 24.5 times earnings).
Earnings per share:
= Net income ÷ shares outstanding
= $10 million ÷ 5 million
= $2 per share
P/E Ratio = Price per share ÷ Earnings per share
Price per share = $2 × 24.5
= $49
(d) The expected holding period return (latest stock price: $40 per share).
= (Final price - Initial price + Dividend) ÷Initial Price
= ($49 - $40 + $1) ÷ $40
= 25%
Answer:
The difference in human capital explains $7,863 of the income per worker gap while the difference in physical capital explains $20,181 of the income per worker gap.
Explanation:
Human capital refers to the skills, knowledge, and efforts of the people in producing goods and services. It is also known simply as labor. Physical capital refers to the "man-made" goods that assist in production, including machinery, equipment, and technological items such as computers.
In the given scenario, the income per worker in the United States is $82,359 - $54,315 = $28,044 more than the income per worker in South Korea. This is explained by differences in both the level of technology (i.e. physical capital) and the capability of workers (i.e. human capital).
We are informed that the income per worker in South Korea would be $74,496 if it had the same level of technology as the United States. This means that $74,496 - $54,315 = $20,181 of the income per worker gap between the two countries is explained by differences in physical capital. Hence the remaining difference of $28,044 - $20,181 = $7,863 is explained by differences in human capital between the two countries.
B. To see where most of your money is going
I'm taking the test right now on apex.
Similar to a stock split, a stock <u>dividend</u> also distributes additional shares of stock to existing stockholders on a pro rata basis at no cost to the stockholders.
A stock split is a decision made by the board of directors of a firm to issue more shares to present owners in order to increase the number of shares outstanding.
A stock split is a division of issued shares in a ratio determined by the company, whereas a stock dividend is a dividend paid in the form of extra shares. While in a stock split, already issued shares are divided in accordance with a predetermined ratio, a stock dividend gives stockholders extra shares.
To know more about Stock Split here
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Answer:
GDP Price Deflator
Explanation:
GDP price deflator is a measure of the general changes in the price level of all the finished goods and services in a country in a period. While GDP is a measure of the total output in an economy, the GDP price deflator shows the extent to which prices changed in a period. In proving the effects of price changes, the GDP deflator identifies a base year then compares the current prices to base year prices.
The GDP price deflator allows economists to compare the GDP of different periods while considering the inflation between those periods. It does this by comparing the nominal GDP with the real GDP.
