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zheka24 [161]
3 years ago
15

Common stock​ value: Constant growth The common stock of Barr Labs​ Inc., trades for ​$120 per share. Investors expect the compa

ny to pay​ a(n) ​$1.37 dividend next​ year, and they expect that dividend to grow at a constant rate forever. If investors require​ a(n) 15.8​% return on this​ stock, what is the dividend growth rate that they are​ anticipating?
Business
1 answer:
BlackZzzverrR [31]3 years ago
5 0

Answer:

Dividend growth rate anticipated = 14.66%

Explanation:

Using dividend growth model we have

P{_0} = \frac{D{_1}}{K{_e} - g}

Where P{_0} = Current market price = $120

D{_1} = Dividend to be paid at year end or next year = $1.37

K{_e} = Expected return on equity = 15.8%

g = Expected growth rate

Now putting values we have

$120 = \frac{1.37}{0.158 - g}

0.158 - g = \frac{1.37}{120} = 0.0114

0.158 - 0.0114 = g

0.1466 = g = 14.66%

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Answer:

Gross profit=15,000-9,375=$5,625

Explanation:

Gross profit can be calculated by the any corporation as follows:

Gross profit: Sales- Cost of sales

In given scenario, sales and cost of sales can be determined as follows:

Sales=Number of LF units sold by Jermaine Dye Corporation*sale price per unit of LF

       =1,000*15=$15,000

The corporation is selling LF for 15$ which is 3 times the price at which it is selling 1B and assuming that the entity is earning same gross profit margin on both products, then cost of sales can be determined as follows:

Lets say that cost of one unit of "1B" is "z" then the cost of one unit of "LF" will be "3z" and following equation can be formed for cost of sales:

3,000(3z)+7,000(z)=50,000

9000z+7000z=50,000

16,000z=50,000

z=$3.125(50,000/16,000)=cost of one unit of 1B

Cost for one unit of LF=3*3.125=$9.375

Cost of sales for 1,000 units=9.375*1000=$9,375

Gross profit=15,000-9,375=$5,625

5 0
3 years ago
1. Cost-volume-profit analysis assumes all of the following EXCEPT:
UkoKoshka [18]

All are assumed except <u>A. Total variable costs remain the same over the relevant range.</u>

<u />

Cost-volume-profit analysis examines how changes in cost in volume affect income. Variable costs are ones that go up and down depending on production levels, so it would not make sense to assume that variable costs stayed the same over the relevant range.

5 0
3 years ago
What is 2×78 please help​
Anvisha [2.4K]

Answer:

156

Explanation:

78

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Can investing in your education or training make you even more likely to obtain and keep a job
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LO 6.3A company calculated the predetermined overhead based on an estimated overhead of $70,000, and the activity for the cost d
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Answer:

$68,600

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A = \frac{1,350+1,100}{2,500}*\$70,000\\ A = \$68,600

The total amount of overhead assigned to the products is $68,600.

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