Kroger is a retail food chain with over 2,500 supermarkets nationwide. Although it does not produce any items, it markets a line of canned and frozen goods carrying the Kroger name. This is an example of product adaptation.
Product adaptation is the process of adapting an existing product so it is suitable in different customers and markets.
Answer:
Return on equity(r) = 0.16
Plowback ratio(b) = 50 = 0.5
Earnings per share(EPS) = $2
D1 = 50% x $2 = $1
Cost of equity(Ke) = 0.12
Growth rate(g) = b x r
= 0.5 x 0.16
= 0.08 = 8%
Current market price(Po) = D1/Po + g
= $1/0.12 - 0.08
= $25
Market price in 3 years = Po(1+g)n
= $25(1+0.08)3
= $25(1.08)3
= $31.49
Explanation:
In this case, we need to calculate growth rate by multiplying the plowback ratio by return on equity. Then, we will calculate the current market price as shown above. Thereafter, we will subject the current market price to a 3-year growth rate to calculate the market price in 3 year's time
Megan's wage is 18 beignets per hour in 2010. The price of a comic book is $9.00 in 2010. The price of a comic book is $18.00 and the price of a beignet is $2.00; Monetary neutrality is the proposition that a change in the money supply nominal variables and real variables.The inflation rate is the difference between nominal and real variables. Nominal variables are based on the current prices and are measured in price based on the value they hold at a given time. Real variables are adjusted for the ever changing price level and they change over time.
The company’s earnings per share would still be based on the
common shares outstanding of 9,500. This is because the 4,500 selling
transaction is not yet accounted for that last accounting period. Therefore,
Earnings per share = $33,250 / 9,500 shares
Earnings per share = $3.5 per share
