1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
hoa [83]
2 years ago
14

Sultan Services has 1.2 million shares outstanding. It expects earnings at the end of the year of $6.0 million. Sultan pays out

60% of its earnings in total: 40% paid out as dividends and 20% used to repurchase shares. If Sultan's earnings are expected to grow by 5% per year, these payout rates do not change, and Sultan's equity cost of capital is 10%, what is Sultan's share price?A) $60.00 B) $12.00 C) $36.00 D) $24.00
Business
1 answer:
Kisachek [45]2 years ago
5 0

Answer:

A) $60.00

Explanation:

to calculate the value of Sultan's stocks, we need to use the growing perpetuity formula:

stock price = dividend / (required return rate - growth rate)

  • dividend = ($6,000,000 x 60%) / 1.2 million shares = $3,600,000 / 1.2 million shares = $3 per share
  • required return rate = 10%
  • growth rate = 5%

stock price = $3 / (10% - 5%) = $3 / 5% = $60 per share

You might be interested in
What is a form in computer?​
sp2606 [1]

In a database context, a form is a window or screen that contains numerous fields, or spaces to enter data. Each field holds a field label so that any user who views the form gets an idea of its contents. A form is more user friendly than generating queries to create tables and insert data into fields.

7 0
2 years ago
Khái niệm sản phẩm dịch vụ ngành Tài chính – ngân hàng
umka2103 [35]
What? I don’t understand sorry
3 0
3 years ago
Journalize the adjusting entries from the adjustments columns of the worksheet. (Credit account titles are automatically indente
Crazy boy [7]

Answer:

The following are the adjusting entries and the amounts entered are supposed and imaginary.

Explanation:

Date          Account Titles and Explanation        Debit          Credit

Mar. 31          Supplies Expense  Dr                    10,000

                          Supplies Account  Cr                                 10,000

When supplies are expensed out. If supplies have a balance of 30000 and 10000 is used up.

Mar. 31         Depreciation Expense  Dr             5000

                    Accumulated Depreciation  Cr                        5000

Depreciation expense amounts to 5000 for the current year

Mar. 31      Unearned Service Revenue Dr      3000

                         Service Revenue      Cr                         3000

Unearned Service Revenue is a liability of the person or company.

Mar 31.   Salaries and Wages Expenses  Dr      2000

                                Cash      Cr                                     2000

Slaries and wages paid in full by cash to 2000

6 0
3 years ago
Formal planning means specific goals are formulated and never reduced to writing but simply communicated.
Alexxx [7]
<span>The statement that formal planning means specific goals are formulated and never reduced to writing but simply communicated is false. 
</span><span>In opposite formal planning is type of strategic planning that includes writing of the organization's goals and objectives. The given definition refers to the informal planning. </span>
3 0
3 years ago
The variable overhead rate is $9.30 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $106,140 per m
Pani-rosa [81]

Answer:

Cash= 87,910 + 9.3*direct labor hour

Explanation:

Giving the following information:

The variable overhead rate is $9.30 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $106,140 per month, which includes depreciation of $18,230.

Cash= (106,140 - 18,230) + 9.3*direct labor hour

Cash= 87,910 + 9.3*direct labor hour

8 0
3 years ago
Other questions:
  • Paleoanthropologists would have a greater interest in ____
    14·2 answers
  • U.i designs is an all equity firm that has 40000 shares of stock outstanding. the company has decided to borrow $1 million to bu
    6·1 answer
  • Please i need your help guys!
    11·1 answer
  • Frito Lay is owned by Pepsi and has a variety of billion dollar brands such as Doritos, Cheetos, Lays, and Ruffles. These famous
    12·1 answer
  • Presented here are long-term liability items for Skysong, Inc. on December 31, 2017.
    13·1 answer
  • "Sherry says, "All the paperwork is filled out wrong. We have to do everything over again." June replies, "No, I see at least th
    11·1 answer
  • What do liquidity ratios measure? Select one:
    7·1 answer
  • What do organisations need to consider when implementing best practice performance management systems?
    10·1 answer
  • The concept of demand is best described as the quantity of a good or a service that people will offer for sale at different poss
    15·1 answer
  • Question 27 (2 points)
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!