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sashaice [31]
3 years ago
13

Stockbridge Sprockets Inc. earned $2.25 per share last quarter, and $2.50 in the last quarter of 2019. Because of declining dema

nd for sprockets, analysts’ consensus estimates for the company for this quarter are $1.90 per share. If the company’s actual earnings announcement is $2.00 per share, absent any other news, what could the price of the stock be expected to do following the announcement?
A. Go up
B. Go down
C. Go either up or down
D. Remain unchanged
E. There is nothing in the data provided that would cause the stock price to move
Business
1 answer:
pochemuha3 years ago
4 0

Answer:

A. Go up

Explanation:

The actual earnings was more than the analysts' estimate. It is a positive surprise to the market. So, the stock price goes up all else being equal.  The stock price goes up, not down , hence Option B is incorrect. Option C is incorrect because all else being equal, the stock price goes up . Also, the stock price does not remain unchanged, it goes up  hence Option D is incorrect. Lastly, there is sufficient data to say that the stock price goes up when there is a positive surprise hence Option E is incorrect.

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XZYY, Inc. currently has an issue of bonds outstanding that will mature in 31 years. The bonds have a face value of $1,000 and a
Mamont248 [21]

Answer:

7.31%

Explanation:

The question is pointing at the bond's yield to maturity.

The yield to maturity can be computed using the rate formula in excel as provided below:

=rate(nper,pmt,-pv,fv)

nper is the number of times the bond would pay annual coupons which is 31

pmt is the annual coupon payment i.e $1000*8.0%=$80.00

pv is the current price of the bond which is $1,084

fv is the face value of the bond which is $1,000

=rate(31,80,-1084,1000)=7.31%

The yield to maturity is 7.31%

That is the annual rate of return for an investor that holds the bond till maturity.

3 0
3 years ago
1. Reynolds Corporation has the following cost and production information available for the 10,000 units they plan to produce th
serg [7]

Answer:

Explanation:

Total cost per unit <u><em>(Which is calculated by adding up the fixed costs and variable costs and dividing by the overall quantity of units produced.)</em></u> is calculated below:

(20 + 30 + 8 + 13 + 12 + 7)

90

Desired return

20% on 1440000

288000

Per unit 288000/10000.

28.8

Markup on cost

Desired return per unit

28.8

Cost 90

28.8 /90 = 32% on cost

Target sale price

90+28.8

= 118.8

3 0
3 years ago
Lin’s Dairy uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the b
Nesterboy [21]
What amount should be recorded as Bad Debt Expense for the current year?
Not yet due:
22,000
Estimated Percentage Uncollectible: 3%
Estimated Amount Uncollectible: 660

Up to 120 days past due:
6500
Estimated Percentage Uncollectible: 14%
Estimated Amount Uncollectible:
910

Over 120 days past due:
2800
Estimated Percentage Uncollectible: 34%
Estimated Amount Uncollectible: 952

Estimated Balance in allowance for doubtful accounts: 2522

Current balance in allowance for doubtful accounts: 1200

Bad Debt Expense for the Year: 1322
4 0
2 years ago
Historically, demand has averaged 1447 units per week with a standard deviation of 715. The company currently has 2855 units in
Alik [6]

Answer:

c. 97.558%

Explanation:

Options are <em>"A. 50.0.% B. 2.442% C. 97.558% D.197.0% E. 47,442%"</em>

Mean = μ = 1447

Standard deviation = σ = 715

Observed value = X = 2855

Using z-score formula, Z = (X - μ) / σ

Z = (2855 - 1447) / 715

Z = 1.97

P(Z<1.97) = 0.97558

P(Z<1.97) = 97.558%

So,  the probability of a stock-out is 97.558%.

4 0
3 years ago
You are evaluating the balance sheet for Blue Jays Corporation. From the balance sheet you find the following balances: cash and
bezimeni [28]

Answer:

a. Current ratio=2.105

b. Quick ratio=1.053

c. Cash ratio=0.211

Explanation:

a.

<em>Step 1: Determine total current assets</em>

The total current assets can be expressed as;

T=C+R+I

where;

T=total current assets

C=cash and marketable securities

R=accounts receivable

I=inventory

In our case;

T=unknown, to be determined

C=$200,000

R=$800,000

I=$1,000,000

replacing;

T=(200,000+800,000+1,000,000)=$2,000,000

Total current assets=$2,000,000

<em>Step 2: Determine total current liabilities</em>

The total current liabilities can be expressed as;

T=W+A+N

where;

T=total current liabilities

W=accrued wages and taxes

A=accounts payable

N=notes payable

In our case;

T=unknown, to be determined

W=$250,000

A=$400,000

N=$300,000

replacing;

T=(250,000+400,000+300,000)=$950,000

Total current liabilities=$950,000

<em>Step 3: Determine current ratio</em>

The current ratio can be expressed as follows;

Current ratio=total current assets/total current liabilities

where;

Current ratio=unknown, to be determined

total current assets=$2,000,000

total current liabilities=$950,000

replacing;

Current ratio=(2,000,000/950,000)=2.105

b.

<em>Step 4: Determine quick ratio</em>

The quick ratio can be expressed as follows;

Quick ratio=(current assets-inventory)/current liabilities

where;

Quick ratio=unknown, to be determined

current assets=$2,000,000

inventory=$1,000,000

current liabilities=$950,000

replacing;

Quick ratio=(2,000,000-1,000,000)/950,000

Quick ratio=1,000,000/950,000=1.053

Quick ratio=1.053

c.

<em>Step 4: Determine cash ratio</em>

The cash ratio can be expressed as follows;

Cash ratio=(cash+marketable securities)/current liabilities

where;

Cash ratio=unknown, to be determined

Cash and marketable securities=$200,000

current liabilities=$950,000

replacing;

Cash ratio=(200,000/950,000)=0.211

Cash ratio=0.211

7 0
3 years ago
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