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aev [14]
3 years ago
7

Gruber Corp. pays a constant $8.45 dividend on its stock. The company will maintain this dividend for the next 15 years and will

then cease paying dividends forever. The required return on this stock is 13 percent. What is the current share price?
Business
1 answer:
nata0808 [166]3 years ago
5 0

Answer:

The price of the stock today is $54.61

Explanation:

The stock of this company pays a constant dividend for a defined period of time after equal intervals. Thus, it is just like an annuity. To calculate the price of such a stock, we will use the present value of annuity formula:

Assuming that the dividend is paid at the end of the period.

Present Value of Annuity = Dividend * [(1 - (1+r)^-n) / r]

Where,

  • r is the required rate of return
  • n is the number of years of annuity

The price of the stock today is,

P0 = 8.45 * [(1 - (1+0.13)^-15) / 0.13]

P0 = $54.607 rounded off to $54.61

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Bear Tracks, Inc., has current assets of $2,280, net fixed assets of $10,400, current liabilities of $1,405, and long-term debt
Vera_Pavlovna [14]

Answer: $7185

Explanation: Shareholders equity refers to the amount of funds that are collected by the company by selling their ownership rights in the market to the general investors.

As per the subject matter of accounts, every asset that is owned by an organisation is either financed by the available funds or some liability is taken to buy it. This could be illustrated as follows :-

assets =  shareholders equity + liabilities

Putting the values into equation we get :-

$2280 + $ 10,400 = $1,405 + $4090 + shareholders equity

therefore :-

shareholders equity = $7185

6 0
3 years ago
It is necessary to retain information for two significant reasons: legal obligation and business needs. Data that occupies the c
baherus [9]

Answer:

The correct answer is letter "B": business.

Explanation:

Business data represents the information of the transactions a company carries out as a result of its operations. Information about suppliers and customers is recorded for control purposes and, mainly, to cover the legal obligation to report the accounting analysis of the firm in the Financial Statements.

Besides, the accounting information of a firm allows managers to compare budget expectations with the current performance of the company to take decisions on what course the entity should follow to reach its objectives.

6 0
3 years ago
On December 31, Strike Company sold one of its batting cages for $20,000. The equipment had an initial cost of $310,000 and had
KonstantinChe [14]

Answer:

d.loss of $30,000

Explanation:

The initial cost of the cage: $310,000.00

Selling price: $ 20,000.00

Depreciation recorded: $260,000.00

calculating book value: (initial cost-Depreciation)

=$310,000-$260,000

Book value =$50,000.00

Profit or loss=selling price- book value.

=$20,000.00- $50,000.00

=($30,000.00)

loss of $ 30,000.00

8 0
3 years ago
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Olegator [25]

Answer:

D. The auditor should assess the risks of material mis-statement due to fraud.

Explanation:

At the time of auditor visit in a company the financial statement represent that the company has done the fraud in this scenario, the auditor should analyze the material misstatement risk that is done for fraud

Therefore in the given case, the option D is correct as the auditor responsibility is that he or she should analyze the risk with respect to the false statements presented in the financial statement

6 0
3 years ago
It costs garner company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. a fore
Tema [17]
It would be an increase of $6.000 as <span>the effect in net income ($15 selling price less $13 variable cost (the original $12 plus the $1 shipping cost)) or $2 per scale. </span>

8 0
3 years ago
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