Answer:
correct option C
Explanation:
Give data:
next four year dividend - $0.40,$0.60, $0.75 and $1.00
interest rate - 3.5%
Year Particulars Amount [email protected]% PV
1 Dividend 0.4 0.881 = 0.4 *0.881 = $0.3524
2 Dividend 0.60 0.7763 = 0.60 *0.7763 = $ 0.4658
3 Dividend 0.75 0.6839 = 0.5129
4 Dividend 1.00 0.6029 = 0.6026
4 Price $10.350 0.6026 = 6.2367
current value = (0.3524 + 0.4658+0.5129+0.6026+6.2367) = $8.17
[email protected]% for dividend 0.40
= 
= 
[email protected]% for dividend 0.60
= 
= 
Price is calcualted as
= \frac{year\ 4*1.035}{13.5\% - 3.5\%}
=\frac{4*1.035}{13.5\% -3.5\%}
Answer:
stock price will not change at all
Explanation:
Based on the information provided it can be said that when the company releases its next earnings report the stock price will not change at all. This is because stock markets move fast, the stock price of EPS moved when the in the announcement about FDA approval was made. Therefore the markets already expect these changes to reflect on the earnings report so prices will not move. Just as the saying goes, "Buy the Rumor, Sell the news."
Answer:
d. Bargaining power of buyers
Explanation:
The porter five forces are as follows:
1. The rivalry among competitors deals with the strength and weaknesses of the competitors in order for the company to plan accordingly.
2.The supplier's bargaining power stated that the price change of the product made by the supplier's offer plus the customer is attracted to the product because the product is unique and has an impact on the overall profit.
3.The purchaser's bargaining power deals with the number of purchasers and how many orders a single purchaser places.
4. The threats posed by new entrants affect the overall position of the company where the competitor enters the market.
5. The threat of substitution is an alternative method of producing goods and services that can also have a direct influence on your position and on productivity.
As the given situation focuses on the customers network that reflects the bargaining power of buyers.
Answer:
a. Income before advertising budget increase:
= Contribution margin - Fixed costs
= (38 * 3,600) - 79,000
= $57,800
Income after advertising budget increases:
= Sales - Variable expenses - Fixed expenses
Sales = (3,600 + 100 units) * 95 per unit
= $351,500
Variable expenses = 60% * 351,500
= $210,900
Fixed expenses = 79,000 + 8,400 advertising
= $87,400
Income = 351,500 - 210,900 - 87,400
= $53,200
b. Income decreased with the increase in advertising so<u> Advertising budget should not be increased. </u>
