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grigory [225]
4 years ago
6

Dean Brothers Inc. recently reported net income of $1,500,000. The company has 300,000 shares of common stock. The stock current

ly trades at $60 a share. The company continues to expand and anticipates that one year from now its net income will be $2,500,000. Over the next year the company also anticipates issuing an additional 100,000 shares of stock, so that one year from now the company will have 400,000 shares of common stock. Assuming the company's price/earnings ratio remains at its current level, what will be the company's stock price one year from now?
Business
1 answer:
vladimir1956 [14]4 years ago
7 0

Answer:

$75

Explanation:

The formula to compute the price -earning ratio is shown below:

Price earning ratio = Market price ÷ Earning per share

where,

Market price is $60

And the earning per share is

= ($1,500,000 ÷ 300,000 shares)

So, price earning ratio is 12

Now the company stock price is

$12 = Stock price ÷ (2,500,000 ÷ 400,000)

So, Stock price is $75

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According to the information given in the question,  the best option to pursue would be early retirement.

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2 years ago
Why are we forced to make choices in day-to-day life? we are forced to make choices in day-to-day life because of resources.
rewona [7]
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6 0
3 years ago
Read 2 more answers
Sarasota Company has a balance of $2,200 in Allowance for Doubtful Accounts before adjustment. The estimated uncollectibles unde
andrew-mc [135]

Answer:

Debit : Allowance for doubtful debts = $2900

Credit : Accounts receivables = $2900

Explanation:

An account for allowance for doubtful debts is a contra account created, predicting that certain debtors will not be able to pay for the goods and services they purchased. This may be based on historical experiences. Doubtful debts aren’t officially uncollectible, it is simply an estimation made, but bad debts are, where you have officially written off a certain accounts receivable as uncollectible.

An allowance for doubtful debts is recorded in the balance sheet, directly under accounts receivables. Bad debts are recorded as an expense in the income statement. When there is an allowance for doubtful debts, the bad debts account is debited and the allowance for doubtful debts account is credited.

According to the question, the balance was $2,200 (Cr) in the allowance for doubtful debts account. The initial expected amount for allowance for doubtful debts was $5100 (Cr). This means that the difference was the amount that was declared as uncollectible and officially written off i.e. bad debts. Thus $2900 ($5100 -$2200) would have been confirmed as bad debts.

The entry to record the above transaction is:

Debit : Allowance for doubtful debts = $2900

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5 0
3 years ago
Any actions a firm takes that have the effect of reducing the level of rivalry in an industry that also do not require firms in
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Answer:

tacit cooperation is the correct answer.

Explanation:

3 0
3 years ago
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Anastasy [175]

Answer:

Command

Explanation:

Based on the information given the East Germans were living with COMMAND economy.

COMMAND ECONOMY occur in a situation where people are be authoritated, instructed or directed to do something without giving them the right to Decide and acquired what they want , desire or wish to have.

A country economy can be tend to be classified as a COMMAND ECONOMY when the government of such country are in total controlled of the economy of the country just as in the case of East Germany.

Therefore East Germans were living with what COMMAND economy.

5 0
3 years ago
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