Answer:
a. $26.67
b. 2.50%
Explanation:
a. Computation of the current value of the stock is given below:-
Price of stock ÷ Required rate of return - Growth rate
= $1.20 ÷ (0.07 - 0.025)
= $1.20 ÷ 0.045
= $26.67
b. Computation of capital gains yield on this stock is shown below:-
= Required rate - Dividend yield
= 7% - ($1.20 ÷ $26.67)
= 7% - 0.04499
= 2.50%
Answer:
1. The GDP deflator for this year is calculated by dividing the <u>value of all goods and services produced in the economy this year</u> using <u>this year's prices </u>by the <u>value of all goods and services produced in the economy this year </u>using <u>the base year's prices</u> and multiplying by 100.
This is why the formula for the GDP deflator is = GDP by year n prices/ GDP by base year prices.
2. However, the CPI reflects only the prices of all goods and services<u> bought by consumers. </u>
<u />
3. Which does an increase in the price of a Chinese-made car that is popular among U.S. consumers show up in? - <em><u>B) CPI</u></em>
The Chinese-made car is not made in the US and is included in the basket of goods consumers buy which is used to calculate calculate CPI.
4. Which does a decrease in the price of a Treewood Equipment feller buncher, which is a commercial forestry machine that cuts and stacks trees show up in? - <em><u>A) GDP Deflator</u></em>
This is not part of the goods in the basket and it is assumed to be made domestically so it is part of the GDP Deflator.
Answer:
A) Debit of $1,445
Explanation:
Closing entries refers to the balance statements that are entered at the end of an accounting period in order to transfer the temporary account balances into permanent accounts. Based on the balances listed in the question it can be said that the closing entry to retained earnings will be Debit of $1,445. This refers to money going out of the account and can be calculated by adding all the revenue to the account and subtracting the expenses leaving $ - 1,445 thus being debit.
Answer: $8.81
Explanation:
To solve this, add the present values of the dividends from years 3, 4 and 5 and then add the present value of the terminal value of the stock at year 5.
Year 3 dividend = $0.50
Year 4 dividend = 0.50 * (1 + 49%) = $0.745
Year 5 dividend = 0.745 * 1.49 = $1.11005
= Dividend in year 3 / (1 + required rate of return)³ + Dividend in year 4 / (1 + required rate of return)⁴ + Dividend in year 5 / (1 + required rate of return)⁵ + (Dividend in year 5 * (1 + growth rate) / ( required rate of return - growth rate ) ) / (1 + required rate of return)⁵
= 0.5 / 1.16³ + 0.745/1.16⁴ + 1.11005/1.16⁵ + ( 1.11005 / (16% - 9%)) / 1.16⁵
= $8.81
Answer:
Seasonal.
Explanation:
A trade discount can be defined as a reduction in the price of goods given by a manufacturer to a wholesaler or retailer when they buy units of goods in larger quantities. This ultimately implies that, a trade discount is a percentage reduction in price given by a manufacturer to a wholesaler or retailer in order to encourage them to buy the goods in larger quantities and thus, increase revenue and profits.
Also, a seasonal discount can be defined as a reduction in the price of goods given during off-peak periods (off-season) in order to encourage customers to purchase a particular product.
Hence, when a firm or store offers a price reduction to customers who buy during off-peak periods throughout the year, we say the firm is giving a seasonal discount.
