Answer:
The total amount of the cash dividend is $7,125
Explanation:
The Dividend is declared to pay all the outstanding shares in the market. Sometime the company has some treasury shares in the stocks which is deducted from the total issued shares to find the outstanding shares. In this case, the issued shares and the outstanding numbers of shares are different.
Treasury shares are those shares that are bought back by the company that issued the shares.
Use the following formula to calculate the cash dividend
Cash Dividend = Numbers of outstanding shares x Dividend rate
Where
Numbers of outstanding shares = 9,500 shares
Dividend rate = $0.75 per share
Placing values in the formula
Cash Dividend = 9,500 x $0.75 per share
Cash Dividend = $7,125
Answer: b) Loss of $7,500,000.
Explanation:
The total the investment bank paid when underwriting was:
= 10.50 * 10,000,000 shares
= $105,000,000
The total they then sell to the public is:
= 9.75 * 10,000,000
= $97,500,000
The profit is:
= Selling revenue from public - Buying cost from company
= 97,500,000 - 105,000,000
= -$7,500,000
Answer:
d. $2(1.10)/[0.15-0.10]
Explanation:
The formula to compute the today value of the stock by using the Gordon model is shown below:
= Next year dividend ÷ (Required rate of return - growth rate)
where,
Next year dividend is
= $2 + $2 × 10%
= $2 + 0.2
= $2.2
And, the required rate of return is 15%
Plus the growth rate of return is 10%
So, the today value of the stock is
= $2.2 ÷ (15% - 10%
= $44
Supply and demand changes the price of eggs
Answer:
Imports create greater competition in the domestic marketplace.
Explanation:
Comparative advantage is defined as the ability of a company to produce goods at a lower opportunity cost than other competitors. They can now sell the goods at lower prices.
If the company in this scenario have competitive advantage in producing electronics then it is xheap for them to produce.
When they export electronics and import again, it can only mean that the imported electronics have a competitive edge that the company wants to take advantage of. For example higher quality than what is available locally.
