In January, Tongo, Inc., a branding consultant, had the following transactions. a. Received $15,500 cash for consulting services
rendered in January. b. Issued common stock to investors for $14,500 cash. c. Purchased $16,200 of equipment, paying 25 percent in cash and owing the rest on a note due in 2 years. d. Received $8,150 cash for consulting services to be performed in February. e. Bought $1,620 of supplies on account. f. Received utility bill for January for $1,450, due February 15. g. Consulted for customers in January for fees totaling $16,700, due in February. h. Received $20,200 cash for consulting services rendered in December. i. Paid $810 toward supplies purchased in (e). Prepare the journal entry for each of the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
1 answer:
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Answer:
D0 1.50
D1 1.60
D2 1.78
D3 1.94
D4 2.12
D5 2.31
Price of the stock after 5-year $ 77
PV $ 81.75
Explanation:
Earning per share 2.5
Dividend per share 1.5
grow ratio 9%
P/E ratio 24
within 5 year is expected to fall to 20
We solve for the dividend by multiplying the dividends by the grow rate of 9%
We solve for the earning after 5 years:
Principal 2.50
time 5.00
rate 0.09000
Amount 3.85
Then we multiply by 20 to get the value of the stock:
$ 3.85 x 20 = $ 77
We solve the horizon value:
PV $ 81.75