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TEA [102]
3 years ago
5

Jack Taylor started Enterprise Leasing on the premise that if he treated his customers and employees well, profits would follow.

Enterprise managers are trained to give employees recognition for good work and to promote from within. Such recognition is a form ofA. contingent reward.B. intrinsic reward.C. extrinsic reward.D. equity reward.E. hygiene reward.
Business
1 answer:
k0ka [10]3 years ago
6 0

Answer:

The correct answer is C) Extrinsic reward

Explanation:

Extrinsic reward is reward that an employer gives to an employee in compensation for the achievement of something. In this case, what is achieved is very vague ("good work") but in a real firm, it could be something more specific. For example, a sales manager could reward his top selling employees with a monthly salary bonus.

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Cotton On Ltd. currently has the following capital structure: Debt: $3,500,000 par value of outstanding bond that pays annually
jeka57 [31]

Answer and Explanation:

This question is incomplete. Kindly find the incomplete question here

Ordinary shares: $5,500,000 book value of outstanding ordinary shares. Nominal value of each share is $100. The firm plan just paid a $8.50 dividend per share. The firm is maintaining 4% annual growth rate in dividends, which is expected to continue indefinitely.

Preferred shares: 45,000 outstanding preferred shares with face value of $100, paying fixed dividend rate of 12%

The firm's marginal tax rate is 30%.

Required:

a) Calculate the current price of the corporate bond?

b)Calculate the current price of the ordinary share if the average return of the shares in the same industry is 9%?

c) Calculate the current price of the preferred share if the average return of the shares in the same industry is 10%

The computation is shown below:

a. For the current price of the corporate bond

Before that first we have to determine the after tax yield to maturity i.e

After tax YTM = Before tax YTM × (1 - tax rate)

= 12% × ( 1 - 30%)

= 12% × (1 - 0.3)

= 12% × (0.7)

= 8.4%

Now

Price of bond = Interest × PVIFA(YTM%,n) + Redemption value × PVIF(YTM%,n)

Interest = 1000 × 10% = $100

YTM% = 8.4%

n = 20

PVIFA(YTM%,n) = [1 - (1 ÷ (1 + r)^n ÷ r ]

PVIFA(8.4%,20) = [1 - (1 ÷ (1 + 8.4%)^20 ÷ 8.4%]

= [1 - (1 ÷ (1 + 0.084)^20 ÷ 0.084]

= [1-(1 ÷ (1.084)^20 ÷ 0.084]

= [1 - 0.1993 ÷  0.084]

= 0.8007 ÷ 0.084

= 9.5327

PVIF(8.4%,20) = 1 ÷ (1 + 8.4%)^20

= 1 ÷ (1.084)^20

= 0.19926

So, the price of bond is

= $100 × 9.5327 + $1000 × 0.19926

= $953.27 + $199.26

= $1,152.52  

b)Price of stock = Dividend of next year ÷ (Required rate of return - growth rate )

where,

Growth rate = 4%

Required rate of return = 9%

The Dividend of next year = Dividend paid  × (1 +  growth rate)

= 8.50 × (1 + 4%)

= 8.50 × (1 + 0.04)

= 8.50 × (1.04)

= $8.84

Thus the price of the stock is

= $8.84 ÷ (9% - 4%)

= $8.84 ÷ 5%

= $176.80  

c) Price of preference shares is

= Dividend ÷ Required rate of return

where,

Dividend = 100 × 12% = $12

And, the Required rate of return = 10%

So, the price of preference shares is

= 12 ÷ 10%

= $120

6 0
4 years ago
Tourmaline Corporation, a calendar year C corporation, has taxable income of $1.3 million and $3 million for 2017 and 2018, resp
oksano4ka [1.4K]

Answer:

The minimum 2018 estimated tax installment payments for Tourmaline are;

April 15, 2018, $68,250; June 15, 2018, $246,750; September 15, 2018, $157,500; December 15, 2018, $157,500.

Explanation:

3 0
3 years ago
Which of the following acronyms refers to the safety procedure that workers should use when performing maintenance or repair on
ivann1987 [24]
<span>The acronym that refers to the safety procedure that workers should use when performing maintenance or repair o machinery is letter B., LOTO. This acronym stands for Lock Out/ Tag Out. This is also known as "lock and tag". Many industries are using this as safety procedure to assure that machines are properly handles (properly shut off). This safety procedure has been used widely in industries and mandated by law (in some countries) as a safety method in handling dangerous equipment.</span>
6 0
3 years ago
Read 2 more answers
A. store supplies still available at fiscal year-end amount to $1,750.b. expired insurance, an administrative expense, for the f
Pavlova-9 [17]

Answer:

The answer is $1600.

Explanation:

Depreciation Expense store equipment = $1525

accumulated depreciation = $1525

Costs of goods sold = $1600

So, Merchandise Inventory = $1600.

3 0
3 years ago
Suppose that the US Federal Reserve Board was able to confirm that the US economy is in the brink of a recession, operating at a
neonofarm [45]

Answer:

a.) To combat recession the federal reserve board can adopt <u>expansionary monetary policy.</u> The fed can<u> reduce the cash reserve ratio</u>.

b.) The aggregate output and price is going to increase in short run. In the long run though economy will be operating at equilibrium level.

Explanation:

With the decline in the cash reserve ratio the total reserves with the banks will increase. This will boost credit credit creation. As the money supply in the economy increases the aggregate demand will increase. This will further lead to increase in price and output level.

In the medium term, the aggregate supply will also increase though not as much as demand, so there will be excess of demand. The price level will rise further.

In the long run though output will always be at the equilibrium level.

3 0
3 years ago
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