Answer:
Current Price of the Share Stock is $ 37.86 (D)
Explanation:
Using dividend valuation method with a constant growth rate assumption, share price is calculated as : Po =D1/(Ke-g).
Where; Po ⇒Market Value excluding any dividend currently payable
D1= Do(1+g)⇒Expected dividend in one year's time
Ke =Required rate of return by shareholders
g= Dividend growth rate
<u>Calculation</u>
D1 = 5(1+0.06)= $5.3
Hence, Po= 5.3/(0.20-0.06)
Po=$37.86
The share price is expected to reflect the future expected stream of income i.e dividends and capital gains ,discounted at an appropriate cost of capital.
Some of the assumptions of dividend valuation method include but not limited to the following:
- it assumed that investors act rationality and in the same way ;
-the dividend either show growth or no growth;
-the discount rate used exceeds the dividend growth rate.
Answer:
The rate is used to apply overhead at the end of the accounting period.
Explanation:
The formula to compute the predetermined overhead rate is shown below:
= Estimated manufacturing overhead cost ÷ estimated activity
So for this the estimates should be used, the rate should be prepared after the starting. IF there is a single allocation basis so it would not suceed to allocate for all the production departments also this rate would helpful for the managers with respect to keep up to date estimates
Therefore the last option is correct
Answer:
a) labor costs are variable and rise with productivity gains
Explanation:
- A more expensive procedure for the measuring the candidate's job appropriateness can be from the labour costs that are highly variable and varies with the increases in the position of labour productivity.
- Thus companies have to do cost estimation first and based on the performance and the need of the candidate they have to justify there their positions.
Answer:
the equilibrium price is above the price floor.
Explanation:
A price floor is the least amount a good or service can be sold. Price floors are usually set by the government or an agency of the government.
Binding price floors is usually set above equilibrium price.
Non binding price floor is usually set below the equilibrium price.
When price floor is below equilibrium price, it has no effect. Quantity demanded would increase over supply and there would be q shortage in the economy.
If price floor is binding, quantity supplied would be greater than quantity demanded and there would be a surplus.
I hope my answer helps you