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kolbaska11 [484]
3 years ago
13

On January 1, 2014, Dodd, Inc., declared a 15% stock dividend on its common stock when the fair value of the common stock was $3

0 per share. Stockholders' equity before the stock dividend was declared consisted of:
Common stock, $10 par value, authorized 200,000 shares;
issued and outstanding 120,000 shares
$1,200,000

Additional paid-in capital on common stock
150,000

Retained earnings
700,000

Total stockholders' equity
$2,050,000


What was the effect on Dodd's retained earnings as a result of the above transaction?
Business
1 answer:
jeka943 years ago
7 0

Answer: $540,000

Explanation:

Given that,

Fair value of the common stock = $30 per share

Common stock, $10 par value, authorized 200,000 shares;

issued and outstanding 120,000 shares  = $1,200,000

Additional paid-in capital on common stock  = $150,000

Retained earnings  = $700,000

Total stockholders' equity  = $2,050,000

Declared a dividend of 15%:

=  120,000 × $30 × 15%

= $540,000

Since, dividends are paid out Retained earnings. Therefore, retained earnings will decrease by an amount of $540,000.

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The common stock of Alpha Manufacturers has a beta of 1.14 and an actual expected return of 15.26 percent. The risk-free rate of
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Answer: d. The actual expected stock return indicates the stock is currently underpriced.

Explanation:

According to CAPM, the expected return is:

= Risk free rate + beta * (market return - risk free rate)

= 4.3% + 1.14 * (12.01% - 4.3%)

= 13.09%

The actual expected return is greater than the CAPM expected return.

This stock is underpriced because it is bringing in a higher return than CAPM predicted based on the market.

8 0
2 years ago
Assume that you own 3,600 shares of $10 par value common stock and the company has a
kozerog [31]

Answer:

The number of shares of common stock own after the stock spilt is 14,400

Explanation:

The number of shares of common stock own after the stock spilt is computed with the formula as:

Number of common stock after stock spilt = Number of common stock before stock spilt × Stock spilt multiple

= 3,600 × 4 / 1

= 14,400 shares

8 0
2 years ago
Compared to the price elasticity of demand for gasoline, the demand for texaco gasoline will_________.
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Compared to the price elasticity of demand for gasoline, the demand for Texaco gasoline will be <u>more elastic</u>.

Price elasticity of call for is the ratio of the proportion change in the amount demanded of a product to the percentage exchange in rate. Economists hire it to apprehend how supply and demand trade when a product's price changes.

If a fee alternate for a product causes a giant change in both its supply or call for, its miles are considered elastic. Generally, it manner that there are acceptable substitutes for the product. Examples would be cookies, luxury cars, and coffee.

In commercial enterprise and economics, price elasticity refers to the degree to which people, purchasers, or producers alternate their demand or the quantity supplied in response to fee or earnings adjustments. it is predominantly used to evaluate the trade-in consumer call for because of an alternate in an excellent or carrier's price.

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3 0
1 year ago
In early 2008, you purchased and remodeled a 120-room hotel to handle the increased number of conventions coming to town. By mid
Yuri [45]

Answer:

To solve this problem, first let us calculate for the total cost:

Total cost = Capital cost + Cost of capital

Total cost = $ 20 M + 0.10* $ 20 M

Total cost = $ 22 M

The breakeven point would be the price in which the total earnings is equal to the total cost. Therefore:

$ 15M + 20,000 * X = $ 22 M

Where X is the breakeven price in dollars per room per night

Calculating for X:

20,000 * X = $ 7 M

X = $ 350

Therefore the break even price is $ 350 per room per night.

Explanation:

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i believe its D but im not exactly sure

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