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Igoryamba
3 years ago
8

On January 1, 2020, Hage Corporation granted incentive stock options to purchase 26,000 of its common shares at $7 each. The opt

ions are exercisable after one year. The market price of common averaged $8 per share during the quarter ending on March 31, 2021. There was no change in the 220,000 shares of outstanding common stock during the quarter ended March 31, 2021. Net income for the quarter was $9,068. The number of shares to be used in computing diluted earnings per share for the quarter is: (Round your final answer to whole number.)
Business
1 answer:
malfutka [58]3 years ago
5 0

Answer:

223,250 shares

Explanation:

proceeds from the exercise of options

= 26000 × 7 =                                                                                 182,000

used to repurchase common stock at market price

182,000 ÷ 8 =                                                                                   22,750

shares outstanding march 31, 2021          

                                                                                                      220,000

shares to be used in cal diluted EPS;

(26,000 - 22750) + 220,000                                                       223,250‬

       

No. of Shares for computing Diluted Earning per share = 223,250 shares

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kkurt [141]

The Question is incomplete.

The complete question is as follows:

It announces that it plans to pay dividends of $1 per share exactly three years from now and $2 per share exactly four years from now. From year 5 onwards, dividends are expected to grow at a constant rate of 10% per year. The company pays no dividends in years one and two. The risk-free rate is 5%, the company's beta is 1.5 and the expected return on the market is 11%. Calculate the price of this stock today

Answer:

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Explanation:

<em>The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.</em>

Required rate of return

Using the CAPM , the rate of return on equity can be determined as follows:

E(r)= Rf +β(Rm-Rf)

E(r) =? , Rf- 5%, Rm- 11%, β- 1.5

Ke = 5% + 1.5× (11-5)%

   = 14%

Present value of Dividends(PV)

Year                                                      PV

3                       $1.00, × (1.14^(-3) =   0.6749

4                        $2.00× 1.14^(-4) =  1.18416

<em>5 and beyond</em>

<em>This will be done in two (2) steps as follows:</em>

PV in year 4 = (2 × 1.10) /(0.14-0.1) = 55

PV in year 0 = 55× 1.14^(-4) = 32.56

Price of stock

=  0.6749  +  1.18416 + 32.56

=  $34.423

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Answer:

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This occurs because<u> the presence of other similar businesses, whether franchises or independently owned businesses in the market, creates lots of competition for the new franchise.</u>

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velikii [3]
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Over [174]

Answer:

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