1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
maxonik [38]
3 years ago
7

If Cute Camel’s forecast turns out to be correct and its price/earnings (P/E) ratio does not change, what does the company’s man

agement expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places.)
Business
1 answer:
Llana [10]3 years ago
5 0

Cute Camel Woodcraft Company Just reported earnings after tax (also called net income) of $9, 750,000, and a current stock price of $36.75 per share. The company Is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 2, 900,000 new shares of stock (raising its shares outstanding from 5, 500,000 to 8, 400,000). If Cute Camel's forecast turns out to be correct and its price-to-earnings (P/E) ratio does not change, what does the company's management expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places.)

Answer:

The scenario says that

Previous P/E ratio = New P/E ratio after issuance of ordinary shares and increase in earnings after tax

So we have to only find previous data before any changes to find previous P/E ratio which is equal to new P/E ratio. This means it could be used to find new share price which has changed due to increase earnings and ordinary shares.

Previous P/E ratio =  ($36.75 per share * 5,500,000 shares)/$9,750,000

= $20.7308 per share

New P/E Ratio = Market Value of total ordinary shares / Total Earnings

Previous (P/E) = Share price * Total ordinary shares / prev. ear. * 125%

This implies

Share price = Previous (P/E) * Previous earnings * 125% / Total ordinary shares

Share price = $20.7308 / share * $9,750,000 *125% / $8,400,000

Share price = $30.0781 per share.

You might be interested in
Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, "Buy your carpet here, and I'll install it for half of wha
monitta

Answer:

Duty of Loyalty

Explanation:

  • The duty of loyalty, described as a duty, is the duty of a person to act in the best interests of their company, which is not to waste when the individual sees corporate opportunities for their personal benefit, avoid personal interest in transactions between the company and other parties, and keep company information private. .
  • The duty of loyalty that can be seen when Bata engages himself in an interested transaction for the sale of the carpet.

3 0
2 years ago
You are planning to make monthly deposits of $70 into a retirement account that pays 12 percent interest compounded monthly. If
Brums [2.3K]

Answer:

FV= $115,928.81

Explanation:

Giving the following information:

Monthly deposit= $70

Interest rate= 0.12/12= 0.01

n= 24*12= 288

<u>To calculate the future value, we need to use the following formula:</u>

FV= {A*[(1+i)^n-1]}/i

A= monthly deposit

FV= {70*[(1.01^288) - 1]} / 0.01

FV= $115,928.81

6 0
3 years ago
True or False - Taxation is the most obvious disruption to the circular flow free market model.
aniked [119]

Answer:

True

Explanation:

Because it is

8 0
3 years ago
Ions:
kicyunya [14]

Answer: The answers are provided below.

Question:

Here is the complete question:

Marian, a top graduate from Loyola in Humanities, was hired by a major corporation into a management position. Marian finished the corporation's management training program top in her group, and is performing above the norm in her position. She is really enjoying her work.

As a woman she feels isolated, as there are no other women managers and few women in her area. One night at a company party she heard a conversation between two of her male co-workers and their supervisor. They were complaining to him about Marian's lack of qualifications and her unpleasant personality. They cursed affirmative action regulations for making the hiring of Marian necessary.

Marian is very upset and wants to quit.

Questions:

a. Should Marian quit?

b.Are her co-workers correct in their evaluation?

c. Should Marian confront the co-workers?

d. Should Marian file a discrimination suit?

e. Should Marian go to the supervisor?

f. What else could Marian do?

Explanation:

a. No, Marian does not have to quit her job but should rather face the situation. She came top in her group during the management training and she deserves to stay in her position and continue to perform well. She is doing well at her role and the opinion of others does not matter.

b. No, Marian co-workers are not correct with regards to their evaluation. She has sufficient and good qualifications which was the reason she got the job and she is also performing well. Also, Marian does not have an unpleasant personality but rather feels isolated because she is the only woman. Her colleagues should help her out in order to deal with the situation.

c. Yes, Marian should go and confront her co-workers. The co-workers have a wrong image of Marain in their minds and she should speak to them and clear the issues. This will help her to be more social with her male colleagues are also build a better working relationship.

d. No, Marian should not file a discrimination suit. The comments made by her co-workers were not discriminatory but rather she was misunderstood at work due to her reserved personality. She should relate better with her colleagues, be social and also build a bond with her colleagues.

e. Marian should go to her supervisor only when she was not successful when she confronted her colleague. She should confront her co-workers first and if that doesn't work, she can then go to her supervisor.

f. Marian should become social and be more friendly with her colleagues. She should talk and relate with her male colleagues. She can discuss work related issues with them and sometimes offer a helping hand. This would help build a bond.

8 0
3 years ago
Whats your favorite Song guys
kvasek [131]
Gravity ft. tyler the creator
3 0
3 years ago
Read 2 more answers
Other questions:
  • Starbucks is expanding its global operations into South America in spite the real probability of civil wars and terrorist activi
    7·1 answer
  • The Percy family have purchased a heavily wooded property in Northern California. They are planning to build a guest house off t
    5·1 answer
  • Which of the following is needed to apply for a checking account.
    8·1 answer
  • U.S. laws require equality in the workplace for all employees. U.S. citizens who take a job in Germany cannot sue their German e
    8·1 answer
  • Suppose the Federal Reserve increases bank reserves and banks lend out some of these reserves, but at some point banks still hav
    6·1 answer
  • 1. The level of prices and the value of money Suppose the price level reflects the number of dollars needed to buy a basket of g
    7·1 answer
  • Pink Polka Fashion Inc., a multinational clothing brand, has plans to expand in the European Union (EU) marketplace. In order to
    13·1 answer
  • According to Benjamin Lang what is the hardest thing about being an entrepreneur
    9·1 answer
  • The General Fund of the City of Davis Fort has a total fund balance of $1,500,000 as of its fiscal year-end, December 31, 2019.
    6·1 answer
  • A 60-year old customer has a 401(k) account with your firm that has $280,000, mainly invested in growth mutual funds. The custom
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!