Answer:
A. $7,350
Explanation:
The computation of the vested benefit is shown below:
= Average salary × given percentage × five years × vesting percentage
= $70,000 × 3.5% × 5 years × 60%
= $7,350
Hence, the correct option is A.
Answer:
-9.92%
Explanation:
P₀ = Div₁ / (Re - g)
- Div₁ = next year's expected dividend = $1.12 x (1 - 11.5%) = $0.9912
- Re = cost of equity = ?
- P₀ = current stock price = $62.91
- g = dividend's growth rate = -11.5%
Re = (Div₁ / P₀) + g
Re = ($0.9912 / $62.91) - 11.5%
Re = 1.58% - 11.5% = -9.92%
Since the cost of equity or required rate of return cannot be negative, I suppose that investors are not worried about Abbott distributing dividends, instead, they prefer that the company reinvests earnings in new projects.
Answer:
$48,800
Explanation:
Ratio = 2:3
Total investment:
= Benson capital + Orton capital + Ramsey capital
= $60,000 + $40,000 + $20,000
= $120,000
Total Equity of Ramsey:
= 40% of Total investment
= 0.4 × $120,000
= $48,000
Old partners contribution:
= Equity of Ramsey - Ramsey capital
= $48,000 - $20,000
= $28,000
Benson’s capital balance after admitting Ramsey:
= Benson’s capital - Old partners contribution(2 ÷ 5)
= $60,000 - [$28,000 × (2 ÷ 5)]
= $60,000 - $11,200
= $48,800
Answer:
1. This is true.
The Germans will pay a higher price for tuna because the tariff will increase the price of imported tuna and the reduction in completion with the local producers will lead to higher prices as the local producers take up their price.
2. This is true.
German producers no longer have to compete as much with imported tuna which was cheaper. They will therefore be able to raise their prices.
3. This statement is false.
The world price of Tuna DOES NOT increase because the tariff is only applicable in Germany. Other parts of the world will trade tuna as before. This is what is assumed.
4. This statement is true.
If Vietnam was exporting tuna to Germany, they will become worse off because they will see a decline in demand for their tuna on account of the tariffs making the tuna more expensive.
5. This is false.
Vietnamese tuna consumers will still pay the same price to get tuna because Vietnam produces the tuna. It is Vietnam's producers that will suffer not the consumers.
