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Reptile [31]
3 years ago
7

Caspian Sea Drinks needs to raise $26.00 million by issuing additional shares of stock. If the market estimates CSD will pay a d

ividend of $2.46 next year, which will grow at 4.65% forever and the cost of equity to be 10.24%, then how many shares of stock must CSD sell?
Business
2 answers:
wel3 years ago
7 0

Answer:

CSD must issue 590 775 sharesof stock

Explanation:

The market value of any firm is given by number of shares multiplied by the stock price so in this case we want $26 mil we nees number of shares the given information D1 $2.46, g 4.65% and r 10.24% will help us get the stock price in which will help in getting the exact number of shares to be issued

We will use the Gordon Growth Model to calculate the stock price

SP = D1/r -g

     =2.46/ 0.1024-0.0465

      =$44.01

Goal raise $26mil

26000000=stock price * number of share

26000000=44.01*number of shares

number of shares =26000000/44.01=590 775 shares

Explanation:

Klio2033 [76]3 years ago
4 0

Answer:

The number of shares needed to raise $26 miliion will be 590909 shares.

Explanation:

To calculate the number of shares needed to raise $26 million, we first need to findout the price per share at which shares are issued. The fair value or the price per share can be caclculated using the constant growth model of the DDM approach. Thus, the price per share today will be:

P0 = 2.46 / (0.1024 - 0.0465)

P0 = $44.007 rounded off to $44

Thus, at the price of $44 per share, number of shares needed to raise $26 million will be:

No of shares = 26,000,000 / 44  = 590909.0909 rounded off to 590909 shares

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<span>With respect to organizational change, this would also represent a change in the type of waste machines that are used in the Industry. Since the EPA is targeting a 30% reduction of waste generated by coal-fired powerplants, the manufacturing industries are now required to adapt the new method that is  establish to minimize carbon footprint.</span>
8 0
3 years ago
Eastline Corporation had 11,000 shares of $10 par value common stock outstanding when the board of directors declared a stock di
andrey2020 [161]

Answer:

e. Debit Retained earning $49,280 Credit Common stock dividend distributable $35,200

Credit Paid in capital in excess of par value(Common stock) $14,080

Explanation:

The journal entry is as follows:

Retained earnings (3,520 shares × $14)

Dr $49,280

_______ Common stock dividend distributable (3,520 shares × $10)

Cr $35,200

_______ Paid in capital in excess of par value ($49,280 - $35,200)

Cr $14,080

3 0
3 years ago
An information system that contains the specialized knowledge and decision rules used by experts and experienced decision makers
Artemon [7]

Answer:

decision support system.

Explanation:

A decision support system is an intelligent system that automates the organizational decision process by collecting data regarding organizational processes and logical and quantitative learning of factors that directly impact a business.

It is then configured as a very effective tool to reduce the risk inherent in the decision-making process of an expert who does not have much experience to make a decision based on their own knowledge.

6 0
2 years ago
Arianna just made another fantastic​ investment: She purchased 400 shares in Great Gains Corporation for ​$20.0920.09 per share.
Gwar [14]

<u><em>Answer:</em></u>

<u><em>1. Likely the price of the stock either goes up or falls</em></u>

<u><em>2. There is no need for a stop loss order in this scenario.</em></u>

<u><em>3. 5412541.2</em></u>

<u>Explanation</u>:

1. Stock market prices are often  unstable, prices can be up today, the next day they are low.

2. Arianna has already made over 100% profit from the stock since she purchased at a good low price, yesterday's stock close price was still profit for her.

3. A 10% Stop loss price would have been the idea order price rather than the ​$53.7353.73​.

4. Remember Stop loss order are meant to reduce or minimize the loss of investor or trader, a <em>calculated level </em>of  should be carefully decided.

8 0
3 years ago
Daniels Corporation uses the step-down method to allocate service department costs to operating departments.
larisa86 [58]

Answer:

C 503,980 dollars

Explanation:

\left[\begin{array}{ccccc}&General&Physical&Sales&After-sales\\$General&&2,000&27,000&14,000\\$Physical&1,000&&38,000&7,000\\$Direct \: Cost&36,550&70,300&412,500&480,880\\$Allocate G&-36,550&1,700&22,950&11,900\\$Subtotal&0&72,000&435,450&492,780\\$Allocate P&0&-72000&60,800&11,200\\$Total&&&496,250&503,980\\\end{array}\right]

We determinate each service deparment rate:

general: 36,550 / (2,000 + 27,000 + 14,000) = 0.85

we then assign cost of general department and repeat the process for physical

then for physical we do the same:

72,000 / (38,000 + 7.000) = 1.60

5 0
3 years ago
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