Answer:
A) The new value of a share of Summit Systems stock based on this information is $17.65
B) $17.65. This is due to the fact that If the information about Summit Systems has reached the capital market, the revised growth rate has already been applied.
Explanation:
Given:
Equity cost of capital = 11.0 %
Dividend in one year = $1.50
Dividends growth per year = 6.0 %
A) If expected growth rate is 6.0%:
Value of share = Expected dividend ÷ (Cost of capital - Growth rate)
Value of share = $1.50 ÷ (0.1150 - 0.060)
Value of share = $27.27
If expected growth rate is 3.0%:
New_Value of share = Expected dividend ÷ (Cost of capital - Growth rate)
New_Value of share = $1.50 ÷ (0.1150 - 0.030)
New_Value of share = $17.65
Answer: $1,680
Explanation:
According to the Accrual method, revenue from sales is recognized when the obligations of the sale have been fulfilled. In other words, when the goods are delivered.
In March, Baldwin delivers 112 units so this is the units that will be recognized for revenue:
= 112 * 15 per unit
= $1,680
Answer:
B. Resource markets provide the materials businesses need.
Explanation:
A resource market is where businesses buy materials they require for the production of other goods. They are markets for inputs of production. Resource market contrast finished goods markets where customers buy consumer goods and services.
Resource markets are where businesses obtain the factor of production. Land, labor, and capital are purchased from the resource markets.
Debit Income Summary and credit Dividends for $25,000.
Answer: Option 5.
<u>Explanation:</u>
The balancing account of the company or an organisation is where the entries of the company are made and recorded so that at then end of the year the financial position of the company becomes clear to the stake holders of the company.
It is a double entry book keeping record where single entry is made on two sides of the book, the debit side and the credit side. This makes the book in balance for every entry. Entry on the debit and the credit side is made with the same amount to maintain the balance.
