Answer:
Value of the company = $124,019.61
Explanation:
<em>The value of then firm is the present value of its expected future cash inflow discounted at its required rate of return. </em>
<em>In this case, the earnings available to ordinary shareholders becomes the annual cash inflow while the appropriate discount rate is the cost of equity</em>.
The absence of debt in the company's capital structure implies that the cost of equity would be the appropriate discount rate.
And the value of the company would be determined as follows
Value of the company = Earnings after tax/Cost of equity
Earnings after tax = EBIT × (1-Tax rate)= 25,300×(1-0.25)=18,975
Cost of equity = 15.3%
Value of the company = 18975
/0.153= 124,019.6078
Value of the company = $124,019.61
Answer:
[D] The offer of paying the salary for the services of an analyst from the research department.
Explanation:
Soft dollars, also known as brokerage, include any dollars retained on a trade to be used for services for the client's benefit. When brokerage firms pay for research services through commission revenue rather than a direct payment, this arrangement is termed soft dollar payments. The above example shows direct payment of an analyst from the research department rather than through commission revenue.
Answer:
The cost for the company is 375 pounds.
Explanation:
In order to calculate how much did it cost the company in dollars each month to keep the cash on display we would have to make the following calculations:
Current exchanage rate between Pound and dollar = $180,000 / 90,000 pound
= $2 per pound.
Total amount in Display = $180,000
Interest rate in USA = 2%
Monthly cost = $180,000 × 2% / 12
= $3300
Monthly opportunity cost of keeping it on display rather than in a bank account is $300.
Monthly Cost in term of pound = 90,000 × 5% / 12
= 375 Pound.
Monthly cost in term of pound is 375 pound.
Answer:
Have a growth mindset, practice discipline, learn to follow other, set situational awareness
Answer:
If products with a higher contribution margin increase their weight in a company's sales mix, that will lead to a higher total contribution margin, and a higher operating profit.
Explanation:
E.g. a company sells 2 products, and it sells them in equal proportion:
- 100 units of product A, which has a contribution margin per unit of $5
- 100 units of product B, which has a contribution margin per unit of $7
Total contribution margin = $500 + $700 = $1,200
if the sales mix changes, and the sales of product B represent 60% of total sales:
- 80 units of product A, which has a contribution margin per unit of $5
- 120 units of product B, which has a contribution margin per unit of $7
Total contribution margin = $400 + $840 = $1,240