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Mariulka [41]
4 years ago
11

perline, inc., has balance sheet equity of $6.2 million.At the same time, the income statement shows net income of $948600. The

company paid dividends of $493272 and has 100000 shares of stock outstanding. If the benchmark PE ratio is 26, what is the target stock price in one year?
Business
1 answer:
ikadub [295]4 years ago
5 0

Answer:

The target stock price in one year is $264.75

Explanation:

We first calculate the ROE as below

ROE= Earnings / Book value of Equity

ROE= $948,600 / $6,200,000

ROE= 0.153

The payout ratio is:

b=  Dividend / Net income

b = $493,272 / $948,600

b = 0.52

So the sustainable growth rate is:

g = ROE * (1-b)

g = 0.153 * (1-0.52)

g = 0.153 * 0.48

g = 0.07344

The earning in the first year are

EPS1 = $948,600 / 100,000  * (1 + 0.07344)

EPS1 = $9.486 * 1.07344

EPS1 = $10.1827

According to the benchmark PE ratio, the target stock price in one year is

Price = EPS1 * 26

Price = $10.1827 * 26

Price = $264.75

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Zepler [3.9K]

Answer:

The correct answer to the following question will be "True".

Explanation:

  • The managerial or management design model or principles seems to be a self-assessment tool that allows people and communities to probably decide the aesthetic of a manager or supervisor.
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So that the given statement is true.

5 0
3 years ago
Question 3: what is the total period cost for the month under variable costing?
lesantik [10]

beneath the variable costing technique, all promoting and administrative (constant and variable) fees and glued production overhead is taken into consideration as part of the total period fee. hence, the whole length cost for the month beneath variable costing is $344,000.

underneath variable costing, fixed production overhead is handled as a period price and is charged in complete towards the modern length's profits. 7-2 promoting and administrative charges are dealt with as duration costs underneath both variable costing and absorption costing.

General period expenses encompass any prices that aren't at once related to product production. prison expenses, income commissions, and office components are considered length expenses and have to be recorded as expenses on the balance sheet.

length prices are fees that can't be capitalized on a company's balance sheet. In different phrases, they're expensed in the period incurred and appear at the profits statement. duration fees are also known as length fees.

Learn more about variable costing here: brainly.com/question/6337340

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5 0
2 years ago
Which statement best describes a pure market economy?
natulia [17]

C. The decisions made by producers and consumers drive all economic choices.

5 0
3 years ago
Read 2 more answers
Given a total population of 1 million, a working age population of 500,000, a labor force of 400,000, 300,000 employed, and 100,
Ede4ka [16]

Answer:

the labor force participation rate is 80%

Explanation:

The computation of the labor force participation rate is given below:

Labor force participation rate = labor force ÷  working-age population ×  100

= 400,000 ÷ 500,000 × 100

= 4 ÷ 5 ×  100

= 80%

hence, the labor force participation rate is 80%

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3 years ago
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Dimas [21]

Answer:

contractionary fiscal policy.

Explanation:

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Basically, a fiscal policy affects combined demand through changes in government policies, spending and taxation which eventually impacts employment and standard of living plus consumer spending and investment.

A contractionary fiscal policy is a policy that is typically used by the government to reduce aggregate demand (AD) by decreasing government purchases and increasing income taxes.

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Generally, the government of a country may use a contractionary policy to slow down the economy when there's a a inflation and gross domestic product (GDP) is growing too.

7 0
3 years ago
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