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3 years ago

Bondholders are the owners of the corporation. true or false.

1 answer:

8 0

The owner of a corporation would be called the president (or sometimes its the CEO if it's a smaller company). The bondholders are the people who own bonds that a company gives them. So the answer would be false.

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King Waterbeds has an annual cash dividend policy that raises the dividend each year by 4%. The most recent dividend, Div 0,

vovikov84 [41]

Answer:

a) With a 7% return, the current stock price = $34.67.

b) The current stock price = $17.33, with a 10% return.

c) The current stock price = $14.86, with a 11% return.

d) The current stock price = $9.45, with a 15% return.

e) Current stock price = $7.43 assuming the interest rate is 18%

Explanation:

Requirement A

An investor wants a return of 7%,

We know,

Dividend-growth model, stock price, $P_{0}$ = $D_{1}$ ÷ ( $K_{e}$ - g)

Here,

$P_{0}$ = Today's stock price = ?

$k_{e}$ = 7% = 0.07

g = growth rate = 4% = 0.04

$D_{1}$ = Next year dividend = $D_{0}*(1 + g)$ = $0.50 × (1 + 0.04) = $0.50 × 1.04 = $0.52

Putting the values into the above formula, we can get,

$P_{0}$ = $D_{1}$ ÷ ( $K_{e}$ - g)

$P_{0}$ = $1.04 ÷ (0.07 - 0.04)

or, $P_{0}$ = $1.04 ÷ 0.03

Hence with a 7% return, the current stock price = $34.67.

Requirement B

An investor wants a return of 10%,

We know,

Dividend-growth model, stock price, $P_{0}$ = $D_{1}$ ÷ ( $K_{e}$ - g)

Here,

$P_{0}$ = Today's stock price = ?

$k_{e}$ = 10% = 0.10

g = growth rate = 4% = 0.04

$D_{1}$ = Next year dividend = $D_{0}*(1 + g)$ = $0.50 × (1 + 0.04) = $0.50 × 1.04 = $0.52

Putting the values into the above formula, we can get,

$P_{0}$ = $D_{1}$ ÷ ( $K_{e}$ - g)

$P_{0}$ = $1.04 ÷ (0.10 - 0.04)

or, $P_{0}$ = $1.04 ÷ 0.06

Hence the current stock price = $17.33, with a 10% return.

Requirement C

An investor wants a return of 11%,

We know,

Dividend-growth model, stock price, $P_{0}$ = $D_{1}$ ÷ ( $K_{e}$ - g)

Here,

$P_{0}$ = Today's stock price = ?

$k_{e}$ = 11% = 0.11

g = growth rate = 4% = 0.04

$D_{1}$ = Next year dividend = $D_{0}*(1 + g)$ = $0.50 × (1 + 0.04) = $0.50 × 1.04 = $0.52

Putting the values into the above formula, we can get,

$P_{0}$ = $D_{1}$ ÷ ( $K_{e}$ - g)

$P_{0}$ = $1.04 ÷ (0.11 - 0.04)

or, $P_{0}$ = $1.04 ÷ 0.07

Hence the current stock price = $14.86, with a 11% return.

Requirement D

An investor wants a return of 15%,

We know,

Dividend-growth model, stock price, $P_{0}$ = $D_{1}$ ÷ ( $K_{e}$ - g)

Here,

$P_{0}$ = Today's stock price = ?

$k_{e}$ = 15% = 0.15

g = growth rate = 4% = 0.04

$D_{1}$ = Next year dividend = $D_{0}*(1 + g)$ = $0.50 × (1 + 0.04) = $0.50 × 1.04 = $0.52

Putting the values into the above formula, we can get,

$P_{0}$ = $D_{1}$ ÷ ( $K_{e}$ - g)

$P_{0}$ = $1.04 ÷ (0.15 - 0.04)

or, $P_{0}$ = $1.04 ÷ 0.11

Hence the current stock price = $9.45, with a 15% return.

Requirement E

An investor wants a return of 18%,

We know,

Dividend-growth model, stock price, $P_{0}$ = $D_{1}$ ÷ ( $K_{e}$ - g)

Here,

$P_{0}$ = Today's stock price = ?

$k_{e}$ = 18% = 0.18

g = growth rate = 4% = 0.04

$D_{1}$ = Next year dividend = $D_{0}*(1 + g)$ = $0.50 × (1 + 0.04) = $0.50 × 1.04 = $0.52

Putting the values into the above formula, we can get,

$P_{0}$ = $D_{1}$ ÷ ( $K_{e}$ - g)

$P_{0}$ = $1.04 ÷ (0.18 - 0.04)

or, $P_{0}$ = $1.04 ÷ 0.14

Hence the current stock price = $7.43, with a 18% return.

7 0

4 years ago

Majer Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or RateStandard Co

irina1246 [14]

Answer:

Variable overheads efficiency variance = $13,040 favorable

Explanation:

Variable overheads efficiency variance is the difference between the standard hours of actual output and actual hours valued at the standard variable overhead rate per hour

Hours

5,900munits should have taken (5,900× 0.9) 5,310

but did take 2050

efficiency variance in hours 3,260 favorable

Standard rate per hour $4.00

Variable overheads efficiency variance 13,040 favorable

Variable overheads efficiency variance = $13,040 favorable

3 0

3 years ago

A good’s price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are p

Elza [17]

Answer:

2) Chemotherapy for cancer patients

Explanation:

Chemotherapy for cancer patients is a basic necessity needed for the patient to continue living, so if the price of chemotherapy increases or decreases will not affect the patient's choice of getting it. What can affect the patient's decision is whether he/she can afford the treatment, but even if he/she can't they will seek other ways of trying to obtain it, e.g. going to public hospitals.

5 0

3 years ago

Which of the following is NOT a useful strategy when making an informed purchase?

nasty-shy [4]

The answer to this question is B

8 0

3 years ago

Judge whether the following statement is true or false. One of the key player(s) that the financial manager works with is the

Sauron [17]

Answer:

True

Explanation:

One of the key roles of any manager is controlling the operations under his authority, and the two main tools that a financial manager has to help him/her control the operations under his/her department are the financial controller (internal auditor) and the external auditor firm. In an ideal world, the financial controller should be enough to do this job, but in the real world, things can get complicated and it is always better to have a different point of view. There is always the possibility that the financial controller is not performing his/her job properly, and the external auditor will help us notice this flaws.

8 0

3 years ago