Salt Company reports net income of $360 million for 2017; the company's tax rate is 40%. At the beginning of the year, 200 milli
1 answer:
The company's weighted-average shares for the purpose of calculating basic EPS will be $1.80
Explanation:
- Salt Company reports net income of $360 million for 2017; the company's tax rate is 40%. At the beginning of the year, 200 million common shares were outstanding.
- On July 1, Salt sold an additional 80 million shares and on October 1 distributed a 10% stock dividend.
- On December 1, the company reacquired 24 million of its outstanding shares.
- Salt Company reports net income= $360
- 200 million common shares were outstanding
- EPS =
= $1.80
- The company's weighted-average shares for the purpose of calculating basic the EPS will be $1.80
- Earnings per share (EPS) is a company's net profit which is divided by the number of common shares.
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Answer:
a)
$34.4
b)
$37.20
c) $59.57
Explanation:
Given:
Dividend paid = $2.15
Growth rate = 4% = 0.04
Required return = 10.5% = 0.105
Now,
a) Present value =
for the current price n = 1
thus,
Current price =
=
= $34.4
b) Price in 3 years
i.e n = 3
=
=
=
$37.20
c) Price in 15 years
i.e n = 15
=
=
= $59.57