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Drupady [299]
2 years ago
11

E-eyes.com has a new issue of preferred stock it calls 20/20 preferred. the stock will pay a $20 dividend per year, but the firs

t dividend will not be paid until 20 years from today. the required return on the stock is 7.25 percent. what is the price of the stock 19 years from today
Business
1 answer:
Sophie [7]2 years ago
7 0

The price of the stock 19 years from now would be the present value of all the dividends to be paid starting year 20. Here, to compute the PV of the dividends, we can use the PV of perpetuity formula as the dividends will be paid for the infinite period of time.

Value of the stock after 19 years = Dividend year 20/ required return

= $20 / 0.0725

= $275.86

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Suppose the demand function​ (D) for golf clubs​ is: Q​P, where P is the price paid by consumers in dollars per club and Q is th
Pachacha [2.7K]

Answer:

(a)

The equilibrium price is $75 per club

The equilibrium quantity is 75000 clubs

(b)

A charge a price of $​50 per club. This would result in a surplus of 25000 clubs

Explanation:

Given

Q = 150 - 1.00P --- The demand function

Q = 1.00P --- The supply function

Solving (a): The equilibrium price and quantity

To do this, we equate both functions

This gives:

1.00P = 150 - 1.00P

Collect like terms

1.00P+1.00P = 150

2.00P = 150

Make P the subject

P =\frac{150}{2.00}

P = \$75 ---The equilibrium price

Substitute 75 for P in Q = 1.00P

Q = 1.00 * 75

Q = 75 ---- The equilibrium quantity

Solving (c): When the price is changed to $50

This means that: P =50

The quantity demanded will be:

Q = 150 - 1.00P

Q = 150 - 1.00 * 50

Q = 150 - 50

Q = 100

Subtract the equilibrium quantity from Q = 100  to get the shortage/surplus

\triangle Q = 100 - 75

\triangle Q = 25

<em>Since the change is positive, then there is a surplus.</em>

<em />

8 0
3 years ago
3. Who creates budget resolutions?​
serg [7]

Answer:

the United States Congress

Explanation:

Hope this helps :3

5 0
3 years ago
Enscoe Enterprises, Inc. (EEI) has 220,000 shares authorized, 180,000 shares issued, and 20,000 shares of treasury stock. At thi
son4ous [18]

Answer:

Enscoe Enterprises, Inc. (EEI):

a) Number of shares of stock outstanding is 160,000 shares (180,000 minus 20,000).

b) The book value per share = (value of common stock plus retained earnings) divided by outstanding shares

= $(400,000+ 240,000)/160,000 =  $640,000/160,000 = $4 per share

c) The book value per share represents how the equity shares are valued in the company's accounting records.  This may not be similar to the market value per share.  The market value per share is determined by market sentiments, which cannot be historically accounted for as the book value is.

The book value per share can be compared to the market value per share to determine if a stock is overvalued or undervalued.

At liquidation, the book value per share represents what each shareholder would get if all the assets are sold and liabilities liquidated.  But, the market value per share is what the investor gets if she sells the stock in the market without waiting for the company to be liquidated.

Explanation:

a) Treasury Stock is a contra account to the Common Stock.  When stock is repurchased it reduces the issued shares by the number.  It is only the outstanding stock that has equity interest in the entity.

b) The book value per value is the net worth of the company divided by the number of outstanding shares.  It shows the net assets value per share.  The net assets are the total assets minus the total liabilities.  It is the same thing as Equity or the interests of equity stockholders in the company.

5 0
3 years ago
Two new software projects are proposed to a young, start-up company. The Alpha project will cost $530,000 to develop and is expe
Vsevolod [243]

Answer: See Explanation

Explanation:

The payback period for both projects would be calculated as:

Alpha Project

Cost = $530,000

Annual net cash flow = $60,000

Payback period = Cash / Annual net cash flow

= $530,000 / $60,000

= 8.83

Beta Project

Cost = $170,000

Annual net cash flow = $18,000

Payback period = Cash / Annual net cash flow

= $170,000 / $18,000

= 9.4

We can see that Alpha Project is better as the payback period is lesser than Beta project

3 0
3 years ago
After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $703,938 and Allo
JulijaS [17]

The net realizable value of accounts receivable is $684,204

Explanation:

  • To calculate subtract the doubtful-accounts allowance from the total accounts receivable. The result will be the net realizable value of accounts receivable.
  • accounts receivable = $703,938
  • doubtful-accounts = $19,734.
  • the net realizable value of accounts receivable =
  • accounts receivable ± doubtful-accounts
  • Therefore, the net realizable value of accounts receivable is $684,204

7 0
2 years ago
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