Answer:
The intrinsic value of the stock is $36.55 and option B is the correct answer.
Explanation:
Using the CAPM, we can calculate the required rate of return on the stock which is the minimum return required by the investors to invest in the stock.
r = rRF + Beta * (rM - rRF)
Where,
- rRF is the risk free rate
- rM is the return on market
r = 0.02 + 1.29 * (0.1 - 0.02) = 0.1232 or 12.32%
The stock's dividend growth is constant. Thus, the current price or intrinsic value of such a stock can be calculated using the constant growth model of the DDM. Th formula for price under the constant growth model is,
P0 = D1 / r-g
Where,
- D1 is the dividend expected for the next period or D0 * (1+g)
- r is the required rate of return
- g is the growth rate in dividends
P0 = 3 * (1+0.038) / (0.1232 - 0.038)
P0 = $36.549 rounded off to $36.55
Answer:
C.51.63%
Explanation:
Gross profit percentage = Gross profit/ Net sales ×100
Gross profit $700,400
Net sales $1,356,504
Hence ;
$700,400/$1,356,504 ×100
=51.63%
Therefore the gross profit percentage is
51.63%
Answer:
sales
Explanation:
Based on the scenario being described within the question it can be said that Michael has most likely adopted the sales orientation. This term refers to a business approach that focuses on mainly persuading individual customers to purchase the company's product as opposed to understanding the customer's needs or marketing to a larger audience.
Answer:
Impact on Net Earnings to Sales and Net Earnings to Total Book Assets:
a) A company's Net Earnings to Sales and Net Earnings to Total Book Assets will increase from the 30% due to the 30% increase in sales. This is because the Cost of Goods Sold remained constant.
b) Net Earnings to Sales and Net Earnings to Total Book Assets will decrease by 30% as a result of the increase in Property, Plant, and Equipment, because these also increased the operating and administrative expense, even though Sales and Cost of Goods Sold remained constant.
Explanation:
The net earnings to sales express the ratio of the net income to the sales revenue. The net earnings are the result of deducting all costs from sales revenue. The net earnings to total book assets are the same expression as the Return on Assets.
Answer:
Dr accounts payable $2,300
Cr cash $2300
Explanation:
Initially the cost of the purchases=$4600
Returning half of the disc means the left for the discs actually bought is half of the invoice price of $4600 i.e $2,300
By not paying within the discount period implies that the debt stands at $2,300
Without mincing words,payment of $2,300 to the supplier automatically translates to debiting account payable with $2,300 and crediting cash account with the same amount.
The correct answer would :
Dr accounts payable $2,300
Cr cash $2300
This is missing from the options provided.
