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nexus9112 [7]
3 years ago
14

Here is the income statement for Tamarisk, Inc. TAMARISK, INC. Income Statement For the Year Ended December 31, 2020 Sales reven

ue $419,200 Cost of goods sold 251,500 Gross profit 167,700 Expenses (including $14,200 interest and $28,000 income taxes) 73,500 Net income $ 94,200 Additional information: 1. Common stock outstanding January 1, 2020, was 24,400 shares, and 39,100 shares were outstanding at December 31, 2020. 2. The market price of Tamarisk stock was $12 in 2020. 3. Cash dividends of $22,800 were paid, $5,300 of which were to preferred stockholders.
Business
1 answer:
devlian [24]3 years ago
4 0

Answer:

A) EPS = $2.8

B) P/E ratio = 4.29 times

C) Payout ratio = 24.20%

D) Times interest earned = 9.61 times

Explanation:

A)

Earnings per share (EPS) is the net profit after taxes of the company divided by the number of outstanding shares. However, during the calculation of earnings per share, preferred dividend should be deducted from the net income as preference shareholders' do not get EPS.

We know, EPS = \frac{Net profit - Preferred dividend}{Weighted average number of shares}

Given,

Net profit = $94,200

Preferred dividend = $5,300

Weighted average number of shares = (beginning number of shares + ending number of shares)/2

Weighted average number of shares = $(24,400 + 39,100)/2

Weighted average number of shares = $31,750

Therefore, EPS = \frac{94,200 - 5,300}{31,750}

EPS = $2.8

B)

Price-earnings ratio is the market value of a stock relative to that stock's earnings per share. It is calculated as the stock price dividing the earnings per share.

We know, P/E ratio = \frac{Stock price}{Earnings per share}

Given,

Current stock price = $12

From requirement A, we get EPS = $2.8

Therefore, P/E ratio = \frac{12}{2.8}

P/E Ratio = 4.29 times

C)

When a company calculates the ratio of paying dividends to its stockholders from its net profit, it is termed as payout ratio.

We know, payout ratio = \frac{Total Dividend}{Net income}

Given,

Dividend paid to the stockholders (Including preferred dividend) = $22,800

Net income = $94,200

Hence, payout ratio = \frac{22,800}{94,200}

payout ratio = 0.2420

or, payout ratio = 24.20%

D)

Times interest earned ratio states that how quickly or how easily a company can pay its interest to the debt holders. it is calculated as the ratio between earnings before interest and taxes and interest expenses.

We know, Times interest earned = \frac{Earnings before interest and taxes}{Interest expenses}

Given,

Earnings before interest and taxes = $94,200 + 14,200 + 28,000 = $136,400

Interest expenses = $14,200

Hence, Times interest earned = $136,400/14,200

Times interest earned = 9.61 times

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In 2010, us nominal gdp was estimated to be $14.657 trillion dollars while the real gdp was estimated to be $13.245 trillion. wh
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Answer:

Nominal gross domestic product (GDP) measures the market value of all the new and legal goods and services produced in a country within a year. While real GDP adjusts nominal GDP to inflation. Since inflation is generally positive, real GDP decreases as inflation increases. The higher the inflation rate, the larger the difference between nominal and real GDP. Depending on which year is used as base year (year 0), the difference that existed in 2010 can be either significant or not.

The difference = ($14,657 / $13,245) - 1 = 10.66%, which means that nominal GDP was 10.66% higher than real GDP. If the base year is 2000 or even 2005/6, the difference is very small since the accumulated inflation would only be 10.66% for all these years. But if the base year was 2008 or even 2009, then the inflation rate is high.

8 0
2 years ago
Scribd in the marketplace of today, ________ are the primary means of socializing companies and brands.
MrMuchimi

The answer is: Social networks and related tools

Social media and other related tools allow the companies to provide information regarding their products to a wide variety of consumers segmentation with relatively cheaper price. Due to the low barrier of entry, small businesses often find easier success in marketing through these mediums rather than using traditional media.

4 0
3 years ago
Suppose the cross-elasticity of demand for products A and B is 3.6, and for products C and D is -5.4. What can you conclude abou
nikitadnepr [17]

Answer:

A and B are substitutes

Explanation:

Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.

If cross price elasticity of demand is positive, it means that the goods are substitute goods.

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If the cross-price elasticity is negative, it means that the goods are complementary goods.

3 0
2 years ago
​A stock's average return is 10 percent. The average risk-free rate is 7 percent. The standard deviation of the stock's return i
svet-max [94.6K]

Answer:

The Treynor index for the stock will be 0.02.

Explanation:

The average return of the stock is 10%.

The average risk-free rate is 7%.

The standard deviation of the stock's return is 4%.

Stock's beta is given at 1.5.

Treynor index

= (Portfolio return- risk free return)/beta of the portfolio

=(0.10-0.07)/1.5

=0.03/1.5

=0.02

So, the Treynor index for the stock will be 0.02.

4 0
3 years ago
A $1000 par value bond with 5 years to maturity and a 6% coupon has a yield to maturity of 8%. Interest is paid semiannually. Ca
Katarina [22]

Answer:

$918.89

Explanation:

For computing the current price of the bond we need to apply the present value formula i.e to be shown in the attachment

Given that,  

Future value = $1,000

Rate of interest = 8%  ÷ 2 = 4%

NPER = 5 years × 2 = 10 years

PMT = $1,000 × 6% ÷ 2 = $30

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after applying the above formula, the current price of the bond is $918.89

7 0
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