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Aneli [31]
3 years ago
8

You expect that Bean Enterprises will have earnings per share of $2 for the coming year. Bean plans to retain all of its earning

s for the next three years. For the subsequent two years, the firm plans on retaining 50% of its earnings. It will then retain only 25% of its earnings from that point forward. Retained earnings will be invested in projects with an expected return of 20% per year. If Bean's equity cost of capital is 12%, then the price of a share of Bean's stock is closest to:
A) $17.00

B) $10.75

C) $27.75

D) $43.50
Business
1 answer:
Varvara68 [4.7K]3 years ago
8 0

Answer:

C) $27.75

Explanation:

Earnings:

2.00 x 20% = 0.4 (2.00 + 0.40 = 2.40)

2.40 x 20% = 0.48 (2.40 + 0.48 = 2.88)

2.88 x 20% = 0.576 (2.88 + 0.576 = 3.456)

3.46 x 10% = 0.346 (3.46 + 0.346 = 3.806)

3.80 x 10% = 0.38 (3.80 + 0.38 = 4.18)

Dividends:  

3.46 x 50% = 1.73

3.80 x 50 % = 1.90

4.18 x 75% = 3.135 ( 50% + 25% = 75%)

P0 = 1.73/[(1.12)^4] + 1.90/[(1.12)^5] + (3.14/(0.12 - 0.05))/1.125

     = 27.63

Therefore, If Bean's equity cost of capital is 12%, then the price of a share of Bean's stock is closest to $27.75

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Answer:No, Because the signed agreement was for previous violations, it does not cover future violations.

Explanation: Trademarks are intellectual property rights that is represented by appropriate signs, pictures etc signifying that the owner of the product has the right to the trade if certain types of product or products.

Trademark are legally approved rights that any violations can lead to severe consequences based on the enabling laws as enshrined in the constitution of a country.

5 0
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An individual is attempting to determine if it is necessary to register as an investment advisor due to the nature of some of th
statuscvo [17]

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[D]

Explanation:

Based on the information provided within the question it can be said that the Clients being accredited or qualified would not affect registration requirements or exemptions. This is due to Investment Advisors Act of 1940 and Investment Advisor would have to register if they are giving advice about  securities, being compensation, and being the business of giving advice, regardless if the client are accredited or qualified.

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3 years ago
During August, Salinger Company accumulated 580 hours of direct labor costs on Job 40 and 630 hours on Job 42. The total direct
Inga [223]

Answer:

Dr Work in process $13,210

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Based on the information given the appropriate journal entry to record the flow of labor costs into production during August is:

Dr Work in process $13,210

Cr Wages payable $13,210

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6 0
3 years ago
"Addison Corp. is considering the purchase of a new piece of equipment. The equipment will have an initial cost of $522,000, a 3
Vlad [161]

Answer:

$31,320.00

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The formula for accounting rate of return is the annual net cash flow divided by the initial investment.

If the initial investment was $522,000 and the accounting rate of return is computed to be 6% per year, hence the annual increase in cash flow accruing from the investment can be calculated by changing the subject of the formula.

ARR=annual increase in cash flow/initial investment

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annual increase in cash flow?

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3 years ago
Discuss the tradeoffs between fiber-optic and satellite communication in terms of costs, signal capacity, signaling method, inte
mylen [45]

Answer:

Explanation:

I will split this answer into two options...

Fiber Optic communications work by sending data through beams of light through a series of fiber cables. This allows for data transfer at incredibly high speeds and with an almost non-existent probability of data loss. Since cables need to be connected from one end-point to another this form of communication becomes more expensive and the capability of reconfiguration becomes incredibly difficult. The likelihood of failure is also very low due to the nature of the technology.

Satellite communication sends data wirelessly by beaming the data to satellites and then back down to the destination. This allows for data to be transferred worldwide but runs into the risk of interference, data loss, signal loss etc. Costs are much cheaper than Fiber Optics due to the lack of wiring. Multipoint capabilities are high since endpoints can be placed anywhere with a clear line of sight to the sky, which also means that reconfiguration capabilities are high as well.

5 0
3 years ago
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