Answer:
$2.80
Explanation:
The computation of the corporation’s earnings per share before the offering is shown below:-
Corporation’s earnings per share before the offering = Earnings ÷ Outstanding shares
= $7,000,000 ÷ 500,000
= $2.80
Therefore for computing the corporation’s earnings per share before the offering we simply applied the above formula.
Answer:
(a) $34.61; 11.54
(b) $32.81; 10.94
Explanation:
(a) Stock Price = D ÷ (Ke – G)
Where,
D is dividend next year,
Ke is required rate of return on equity
G is growth rate
Growth rate = ROE × plow-back ratio
= 0.12 × 0.40
= 0.048 or 4.8%
Dividend = Current EPS × (1 - plow back ratio)
= $3 × 0.6
= $1.8
Stock Price:
= $1.8 ÷ (0.10 - 0.048)
= $34.61
P/E Ratio = Stock Price ÷ EPS
= $34.61 ÷ $3
= 11.54
(b) New growth rate = 0.12 × 0.30
= 0.036 or 3.6%
Dividend = Current EPS × (1 - plow back ratio)
= $3 × 0.7
= $2.1
Stock Price = $2.1 ÷ (0.10 - 0.036)
= $32.81
P/E Ratio = Stock Price ÷ EPS
= $32.81 ÷ $3
= 10.94
Answer:
a) 7.2%
b) 7.46%
Explanation:
the loan's principal = $3,200,000 x 80% = $2,560,000
first monthly payment = $17,300 x 360 payments = $6,228,000
total interests charged = $6,228,000 - $2,560,000 = $3,668,000
using a financial calculator:
n = 360
payment = -17,300
present value = 2,560,000
monthly APR = 0.6% x 12 months = 7.2%
effective annual rate = (1 + i/n)ⁿ - 1 = (1 + 0.072/30)³⁰ - 1 = 7.46%
Answer:
Explanation:
Businesses can be affected by various environmental facors as political, economic, social and technological facors (PEST). All of these factors influence the decision making within the organization.
Let's briefly describe each of the factors:
1. Political factors: In some countries there are subsidiaries and tax exemptions for running a particular businesses. For example, tax exemptions for those doing green business or producing electric cars. In order to adress such risks, business people should investigate about legislation and political environment of countries.
2. Economic factors: Businesses are affected by economic well being of the market where it is based. For example, market largely differs in European ccountries and Central Asian countries. Most of the countries in Central Asia are developing countries, whereas European countries are developed and have economic stability. To handle such risks, businessman should research the potential markets on the issues of inflation rate, average income of people and etc.
3. Social factors: How society views the markets and what it demands. Some support green initiatives and want zero waist products and etc.
4. Technological environment: In case of electro cars, if there are no energy for charging them that could be the potential issue. Or if market is not really technologically advanced, business will need to educate the market about their innovational products and etc.
In order to manage such concerns there should be particular research and investigations held and of course financial requirements are important and should be met for budgeting purposes.
