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Ilia_Sergeevich [38]
3 years ago
12

Michael's, Inc., just paid $2.55 to its shareholders as the annual dividend. Simultaneously, the company announced that future d

ividends will be increasing by 5.5 percent. If you require a rate of return of 9.7 percent, how much are you willing to pay today to purchase one share of the company's stock?
Business
1 answer:
tiny-mole [99]3 years ago
4 0

Answer:

$64.05

Explanation:

The computation of the today share is shown below:

= {Current year dividend × ( 1 + growth rate)} ÷ (Required rate of return - growth rate)

= {$2.55 × ( 1 + 5.5%)} ÷ (9.7% - 5.5%)

= ($2.55 × 1.055) ÷ (9.7% - 5.5%)

= 2.69025 ÷ 4.2%

= $64.05

The {Current year dividend × ( 1 + growth rate)} reflect the next year dividend

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9) An investment of $20,000 earns interest at an annual rate of 3.6% compounded continuously. a) Find the instantaneous rate of
Butoxors [25]

Answer:

a) The instantaneous rate of change of the amount in the account after 3 years = dA/dt = 802.114

b) The instantaneous rate of change of the amount in the account when the amount is equal to $25,000 = dA/dt = 900

Explanation:

The detailed step by step and appropriate derivation is as shown in the attachment

6 0
3 years ago
Kirov, Inc. reports credit sales of $200,000 for the year ending December 31, 2015. The year- end unadjusted balance of its Allo
Korvikt [17]

Answer:

D. $12,000

Explanation:

Allowance for Doubtful accounts = Credit sales * Rate

Allowance for Doubtful accounts = $200,000 * 6%

Allowance for Doubtful accounts = $12,000

                       Allowance for doubtful account

Particulars                                            Particulars

Balance brought forward  $9,000     Bad debts       $12,000

Balance carried forward    $3,000  

Total                                    $12,000    Total               $12,000

Therefore, the amount to be debited to Bad debts and credited to Allowance for Doubtful accounts is $12,000.

4 0
2 years ago
If a company reorganizes its operation to gain efficiency, the cost associated with this reorganization is classified as
ivanzaharov [21]

Answer: Restructuring cost

Explanation:

Restructuring cost could be described as making expenses on rejuvenating or reviving or rebranding the company through spendings, which affects most of it's mode of operations, brings a change and innovation and ways to improve existing methods. This is capital intensive due to the work and changes required during the process.

8 0
3 years ago
What is the economic process of withdrawing investments from low profit sectors and investing in new activities?
frozen [14]

Answer:

Creative destruction.

Explanation:

In 1942, the term creative destruction was first to be used by the notable Austrian economist known as Schumpeter Joseph.

Creative destruction is the economic process of withdrawing investments from low profit sectors and investing in new activities.

This ultimately implies that, creative destruction is a concerted effort towards the deliberate destruction or dismantling of long standing products, processes, practices, procedures or services in order to give room for innovative ideas and an improved technique for the production (manufacturing) of goods and services. Thus, the old technology or methods of production are dismantled so as to pave way for new technologies, procedures, goods and services.

8 0
3 years ago
What is the amount of production overhead allocated to the assembling unit cost pool?
Diano4ka-milaya [45]

$800,000 × 40% = $320,000 is the amount required for the production of overhead allocated to the assembling unit cost pool.

Because the activity rates are computed by dividing the total cost for each activity by its total activity &  per unit cost is calculated by dividing the total dollars in each activity cost pool by the number of units of the activity cost drivers. the total cost of each activity pool is divided by the total number of units of the activity to determine the cost per unit.

Cost pool is a grouping of individual costs, typically by department or service center.

Cost per unit the amount of money spent by the company during a period for producing a single unit of the particular product or the services of the company.

Determine means to discover the facts about something.

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4 0
1 year ago
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