Answer:
Assume that the Plow back Ratio is 50
Now,
To Compute the growth rate;
Growth rate = Return on equity × Plow back ratio
Growth rate = 10% × 0.50
Growth rate = 5.0%
Computation of the stock price.
Stock price = Dividend pa share / (Required rate - Growth rate)
Stock price = Earnings pa share × (1 - Plow back ratio) / (Required rate -Growth rate)
Stock price = $4 × (1 - 0.50) / (10% - 5.00%)
Stock price = $2.00 / 5.00%
Stock price = $40
Computation of the P/E ratio.
PIE ratio = Stock price / Earnings pa share
PIE ratio = $40 / $4
PIE ratio = $10
Answer:
uh... 180 divide by 8.5... multiply to 12
Answer: B. $40,000, $960,000
Explanation:
The long term obligation will be 80% of the collateral value which will be:
= 80% × $1.2 million
= 0.8 × $1,200,000
= $960,000.
Therefore, the short term obligation will be:
= $1,000,000 - $960,000
= $40,000
Answer: b. select appropriate corporate-level strategies
Explanation:
Prior to setting pricing options for its products to maximize profit, a company must select appropriate corporate-level strategies.
This is necessary in order to ensure that the strategies aligns with what the organization is willing to do in order to achieve its profit maximization goal.
Answer:
Joan will pay income tax on the $10,000 she withdrew in 2018.
Explanation:
When withdrawing from traditional retirement account, the following rules apply:
1. Withdrawals before attaining the age of 59.5 years attract a penalty of 10%, along with income tax on the amount withdrawn.
2. Withdrawals after the age of 59.5 years are treated as income, so income tax is paid on it. In this case tax on the $10,000 withdrawn.
3. At age 70.5 and above you must take the Required Minimum Distribution (RMD) from the pension account.
Note: Roth IRA does not attract tax payments for ages 59.5 years and above, unlike traditional IRA that attracts income tax.
RMD payments does not apply for Roth IRA.
