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Svetllana [295]
3 years ago
7

Zoom Enterprises expects that one year from now it will pay a total dividend of $4.7 million and repurchase $4.7 million worth o

f shares. It plans to spend $9.4 million on dividends and repurchases every year after that​ forever, although it may not always be an even split between dividends and repurchases. If​ Zoom's equity cost of capital is 13.3% and it has 5.3 million shares​ outstanding, what is its share price​ today?
Business
1 answer:
Ira Lisetskai [31]3 years ago
6 0

Answer:

$13.34

Explanation:

For computing the today price, first we have to determine the present value of equity which is shown below:

The Present value of equity = Spending amount on dividends and repurchases ÷ equity cost of capital

= $9.4 million ÷ 13.3%

= $70,676,691

Now the share price equals to

= Present value of equity ÷ outstanding shares

= $70,676,691 ÷ 5.3 million shares

= $13.34

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At December 31, Gill Co. reported accounts receivable of $238,000 and an allowance for uncollectible accounts of $600 (credit) b
meriva

Answer:

$6,540

Explanation:

Given:

accounts receivable of $238,000

allowance for uncollectable accounts of $600 (credit)

Also, the allowance for uncollectible accounts should be 3% of accounts receivable.

Therefore the amount of the adjustment for uncollectible accounts would be

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4 0
3 years ago
Which of the following statements regarding Federal Reserve independence is​ incorrect?
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Answer:

The correct answer is option D

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Keith Inc. has 4 product lines: sour cream, ice cream, yogurt, and butter. Demand of individual products is not affected by chan
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There will be decrease in profit if dropping of sour cream. So that means Keith Inc would lose $4,000.00

3 0
3 years ago
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Jenny likes chocolates. One​ day, a friend offers her a chocolate bar and she is extremely happy on receiving it. As the day​ pr
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Answer: Law of diminishing marginal utility

                       

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In the given case, Jenny's excitement keeps on decreasing with every chocolate she receives after a certain point of time.

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6 0
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A company receives $290, of which $15 is for sales tax. The journal entry to record the sale would include a
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Answer:

Explanation:

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