If the required return on Computech is 18% the value of the stock in today's calculation is $11.77
<h3>What is the growth rate of a stock?</h3>
This is the percentage change of the stock based on the annualized growth rate over a period of time.
D3 = $0.75
D4 = 0.75 x 1.49 = $1.1175
D5 = 1.1175 x 1.49 = $1.665075
D6 = $1.665075 x 1.10 = $1.8315825
At a growth rate of 10 percent
1.8315825/0.18-0.10
= $
= 0.456473 + 0.576394 + 0.7278196 + 10.0075198
= $11.77
The value of this stock today is $11.77
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Answer:
Current Ratio: 2.49; 2.7; 1.75
Acid test ratio: 1.32; 0.64; 0.65
Explanation:
Current ratio
For Camaro:
= Current assets ÷ Current liabilities
= $ 5,915 ÷ $2,380
= 2.49
For GTO:
= Current assets ÷ Current liabilities
= $3,780 ÷ $1,400
= 2.7
For Torino:
= Current assets ÷ Current liabilities
= $6,900 ÷ $3,950
= 1.75
Acid test ratio:
For Camaro:
= (Current assets - Inventory - Prepaid expense) ÷ Current liabilities
= ($5,915 - $2,375 - $400) ÷ $2,380
= $3,140 ÷ $2,380
= 1.32
For GTO:
= (Current assets - Inventory - Prepaid expense) ÷ Current liabilities
= ($3,780 - $2,180 - $700) ÷ $1,400
= $900 ÷ $1,400
= 0.64
For Torino:
= (Current assets - Inventory - Prepaid expense) ÷ Current liabilities
= ($6,900 - 3,450 - $900) ÷ $3,950
= $2,550 ÷ $3,950
= 0.65
Answer:
Explanation: The specific identification method of costing inventories is used when finding out the cost of the ending inventory.
This method is used to identify when an item is bought and sold and what items are remaining in the store and how to allocate the cost price of item bought at a particular point in time. This is mainly useful when cal calculating the ending inventory.
