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arsen [322]
3 years ago
13

Newton, Inc. just paid an annual dividend of $0.95. Their dividends are expected to increase by 4% annually. Newton Company stoc

k is selling for $11.54 a share. What is the required rate of return on this stock implied by the dividend-growth model
Business
1 answer:
Eduardwww [97]3 years ago
8 0

Answer:

The required rate of return is 12.2%

Explanation:

Dividend growth model is used to calculate the price of the stock based on the dividend, its growth and required rate of return.

Formula to calculate the price

Price = Dividend / ( Required rate of return - Growth rate )

P = D / ( r - g)

P = $11.54

D = $0.95

g = 4%

Now placing the given values in the formula

$11.54 = $0.95 / ( r - 4% )

r - 4% = $0.95 / $11.54

r - 4% = 8.2%

r = 8.2% + 4%

r = 12.2%

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3 years ago
4.You can buy a machine for $100,000 that will produce a net income, after operating expenses, of $10,000 per year. If you plan
Anon25 [30]

Answer:

$124,966.9

Explanation:

The computation of the market or resale value is shown below:

$100,000 = $10,000 ÷ (1.15^1) + $10,000 ÷ (1.15^2) + $10,000 ÷ (1.15^3) + $10,000 ÷ (1.15^4) + Resale value  ÷ (1.15^4)

$100,000 = $8695.65 + $7561.44 + $6575.16 + $5717.53 + Resale value ÷ 1.749006

Resale value ÷1.749006 = $71,450.22

So, the resale value is  = $124,966.9

We simply applied the present value formula

3 0
3 years ago
A flower delivery business wants to raise their overall sales volume to increase profit. After analyzing their costs, they choos
Mrac [35]

Answer:

C) By lowering the price of the flower arrangements to increase demand.

Explanation:

According to the law of demand, the lower the prices, the higher the quantity demanded and the higher the price ,the lower the quantity demanded.

When prices are reduced, demand increases, revenue increases and net profit increases.

I hope my answer helps you.

7 0
3 years ago
Design a study that has a false correlation caused by a lurking variable.
Artemon [7]

An example of a study that has a false correlation caused by a lurking variable is " research scientist examines the influence of diet and exercise on a an individual's blood pressure."

<h3>What is a lurking variable in a study?</h3>

Lurking variable is known to be a kind of a  variable that is said not be the explanatory variable nor can it be called the response variable but it is one that is seen to have a relationship (e.g. correlation) with the response and that of the  explanatory variable.

Note that A lurking variable is one that can be falsely identify as a strong relationship that exist between variables or it is one that often hide the true relationship.

Hence, An example of a study that has a false correlation caused by a lurking variable is " research scientist examines the influence of diet and exercise on a an individual's blood pressure."

Learn more about lurking variable  from

brainly.com/question/13285819

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4 0
9 months ago
Direct Labor Hours Machine Hours Blending Department Whole milk 260 650 Skim milk 245 710 Cream 215 260 720 1,620 Packing Depart
r-ruslan [8.4K]

Answer:

1. Wee have:

Blending department overhead rate = $110 per machine hour

Packing department overhead rate = $135 per direct labor hour

2. We have:

Whole Milk Total factory overhead = $134,950

Skim Milk Total factory overhead = $118,600

Cream Total factory overhead = $46,150

Explanation:

Note: This question is not complete and the data in it are merged together. The complete question with the sorted data are therefore presented before answering the question as follows:

Spotted Cow Dairy Company manufactures three products—whole milk, skim milk, and cream—in two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $299,700.

The three products consume both machine hours and direct labor hours in the two production departments as follows:

                                        <u>Direct Labor Hours        Machine Hours</u>

<u>Blending Department</u><u> </u>

Whole milk                                      260                               650

Skim milk                                         245                                710

Cream                                           <u>   215  </u>                            <u>  260 </u>

                                                    <u>    720   </u>                          <u>  1,620 </u>

<u>Packing Department </u>

Whole milk                                       470                                500

Skim milk                                         300                                 415

Cream                                           <u>    130  </u>                            <u>    165 </u>

                                                    <u>     900   </u>                          <u>  1,080 </u>

Total                                             <u>   1,620 </u>                           <u>  2,700 </u>

The management of Spotted Cow Dairy Company now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows:

Blending Department        $178,200

Packing Department       <u>     121,500 </u>

Total                                <u>   $299,700 </u>

Required:  

1. Determine the multiple production department factory overhead rates, using machine hours for the Blending Department and direct labor hours for the Packing Department.

2. Determine the product factory overhead costs, using the multiple production department rates in (1).

The explanation of the answer is now given as follows:

1. Determine the multiple production department factory overhead rates, using machine hours for the Blending Department and direct labor hours for the Packing Department.

Blending department overhead rate = Blending department overheads / Blending department machine hours = $178,200 / 1,620 = $110 per machine hour

Packing department overhead rate = Packing department overheads / Packing department labor hours = $121,500 / 900 = $135 per direct labor hour

2. Determine the product factory overhead costs, using the multiple production department rates in (1).

Note: See the attached excel file for the determination of the product factory overhead costs, using the multiple production department rates.

In the attached excel file the following formulae are used to calculate the product factory overhead costs:

Blending department factory overhead = Machine fours * Overhead rate per machine hour

Packing department factory overhead = Direct labor hours * Overhead rate per direct labor hour

From the attached excel file, we have:

Whole Milk Total factory overhead = $134,950

Skim Milk Total factory overhead = $118,600

Cream Total factory overhead = $46,150

Download xlsx
6 0
2 years ago
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