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Margaret [11]
3 years ago
11

Company X has 100 shares outstanding. It earns $1,000 per year and expects to pay all of it as dividends. If the firm expects to

maintain this dividend forever, calculate the stock price after the dividend payment. (The required rate of return is 10 percent.)
Business
1 answer:
Leno4ka [110]3 years ago
4 0

Answer:

The stock price after the dividend payment is $100 per share

Explanation:

According to the data the Dividend per year is $1,000  and the Required Rate of Return is 10% .

Hence, in order to calculate the stock price after the dividend payment we have to use the following formula first:

Stock price = [Total Dividend amount / Required rate of return]

Stock price  = [$1,000 / 0.10]

Stock price = $10,000

Finally the Stock price after the dividend payment. = [Total Stock Value / Number of outstanding shares]

Total Stock value = $10,000

Number of outstanding shares = 100 shares

Stock price after the dividend payment = [$10,000 / 100 shares]

Stock price after the dividend payment = $100 per share

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Piedmont Hotels is an all-equity firm with 48,000 shares of stock outstanding. The stock has a beta of 1.19 and a standard devia
user100 [1]

Answer:

The firm set as the required rate of return for the project is 14.732%

Explanation:

For computing the required rate of return, the following formula should be used which is shown below:

= Risk free rate of return + (Beta × market risk premium) + adjustment

where,

Risk free rate of return is 4.1%

Beta is 1.19

Market risk premium is 7.8%

Adjustment is 1.35%

Now put these values to the above formula

So, the value wold be equal to

= 4.1% + (1.19 × 7.8%)+ 1.35%

= 4.1% + 9.28% + 1.35%

= 14.732%

The standard deviation is irrelevant. Therefore, it is not considered in the computation part.

Hence, the firm set as the required rate of return for the project is 14.732%

8 0
3 years ago
The electric utility rate for a facility during the months of May through October is 4.5 cents per kilowatt-hour for energy, $11
Minchanka [31]

Answer: $11564

Explanation:

Total units consumed for August = 96000

There's a peak demand of 624kw

Also, the May through October is 4.5 cents per kilowatt-hour for energy.

The August electric bill will then be:

= 96000 × 4.5/100 + 624 × 11.50 + 68

= (96000 × 0.045) + (624 × 11.50) + 68

= 4320 + 7176 + 68

= 11564

4 0
2 years ago
Accounting systems that use standards for product costs are called budgeted cost systems. True False
Yuri [45]

Answer:

False.

Explanation:

Accounting systems that use standards for product costs are standard cost systems.

In Financial accounting, various business firms or companies use the standard cost systems to determine the variances or differences between the actual (real) cost of goods produced and the estimated cost for the goods that were produced by the company.

Hence, standard cost systems are used by business firms or companies as a strategic tool or technique for the management and control of costs, budget planning, and analyzing cost management performance at a specific period of time.

7 0
3 years ago
You are a very small company that sells healthcare insurance plans. You estimate that the breach of your customer database will
liq [111]

Answer:

Spend $25000 on cyber insurance to transfer the risk

Explanation:

A cyber insurance is the best option since it protects the business from internet based risk such as the breach of customer database and other risks involved in the use of the internet by businesses and individual internet users.

The cost of purchasing a Data Loss Prevention solution that would cost $30000 per year will amount to $150000 in 5 years which will be more expensive compared to the cost of the risk it is been used to prevent. hence it is not a good option. also accepting the risk is a very bad option becasue the risk might harm the business beyond expectation.

5 0
3 years ago
Which of the following best defines tangible products? They refer to the physical entities or services that are offered to a buy
Len [333]

Answer: <em>They refers to the physical entities or service that are offered to a buyer .</em>

Explanation:

The statement written above best defines the tangible commodities. A physical good that can be distinguished by touch. Examples of these are automobile, confectionery items such as beverages etc, personal computers, mobiles, etc. Many business organization are also required to dispense packaging for these commodities in order to provide security during their transportation.

4 0
3 years ago
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