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Likurg_2 [28]
2 years ago
12

Graphical Designs is offering 10-10 preferred stock. The stock will pay an annual dividend of $10 with the first dividend paymen

t occurring 10 years from today. The required return on this stock is 5.20 percent. What is the price of the stock today
Business
1 answer:
tresset_1 [31]2 years ago
6 0

Answer:

PV of the stock today = $115.83

Explanation:

We will use the discounted cash flows approach to calculate the price of the stock today. This approach values the stock by accumulating the present value of all the expected future cash flows from the stock/asset.

As the preferred stock pays a constant dividend after equal intervals of time and for an indefinite period, it can also be treated as a perpetuity. Thus, the formula for the present value of perpetuity will be used to calculate the price of the stock at year 10 that we will discount back to today.

Present value of perpetuity = Cash flow  / expected rate of return

PV of stock at Year 10 = 10 / 0.052

PV of stock at Year 10 = 192.3076923

The value of the today will be,

PV of the stock today = 192.3076923 / (1+0.052)^10

PV of the stock today = $115.83

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Kenyon Co. uses the perpetual inventory method. Kenyon purchased 400 units of inventory that cost $6.00 each. At a later date th
olga nikolaevna [1]

Answer:$5600

Explanation:

The FIFO inventory system is an inventory system where the inventory purchased first is the first to be sold.

If 800 units are sold, the inventory sold would be calculated as:

$6 × 400 = $2,400

$8 × 400 = $3200

=$5,600

4 0
3 years ago
The chief executive of a large telecommunications company wanted to restructure the organization so product leaders would have m
katen-ka-za [31]

This kind of resistance from the product leaders is an example of resistance due to breaking routines. Furthermore, there are more types of resistance to change in an organization's culture & structure.

 

EXPLANATION:

Here is the list of types of resistance to change in an organization’s culture and structure:

• Fear of Failure

Intimidating cultural and structural alterations on the employee can make them doubt their competences. This self-doubt decreases self-confidence and weakens personal development and growth. The workers may resist such alterations without bearing in mind the potential profits of the proposed alterations, as a consequence. The low output might be understood before the workers finally learn and adjust to life with the alterations.

• Loss of Status

Cultural and structural alterations that intimidate to change dominant positions or remove jobs commonly cause strong resistance. Restructuring and reorganization of corporate may include managerial jobs elimination. Middle managers will oppose restructuring and any other agenda that decreases their power and the status they already possess in the organization.

• Non-Reinforcing Reward System

People resist when they do not predict positive prizes for altering their work routines. Workers presume a positive development in their work to voluntarily accept the alteration. A worker is unlikely to help an alteration that is recognized as longer work hours and enlarged pressure to perform.

• Incongruent Group Dynamics

Groups grow and apply conformity to a series of norms that lead the members' behavior. However, conformity to prevailing group norms may deject workers from receiving organizational change. Group norms that disagree with the desired changes need alteration, while the cultural and structural norms that succeed to enhance the organization need promotion.

• Breaking Routines

Individuals are creatures of habit and see it difficult to abort behavioral customs that the organization think through no longer suitable. They prefer comfort zones by remaining routine role patterns. Hence, people oppose cultural and structural changes that push them out of their comfort zones and need devoting more energy and time acquiring new role patterns.

 

LEARN MORE

If you’re interested in learning more about this topic, we recommend you to also take a look at the following questions:

• When involving entry employers, joint entries must be? brainly.com/question/4933698

• A company provides wages to its employees based on the amount workers produce. the more employees produce, the more they earn. this type of plan is called? brainly.com/question/6382273

KEYWORDS : Resistance to change, organization’s culture and structure

Subject  : Business

Class  : 10-12

Sub-Chapter : Organizational Behavior

8 0
3 years ago
Support Department Cost Allocation-Direct Method Charlie's Wood Works produces wood products (e.g., cabinets, tables, picture fr
aivan3 [116]

Answer:

a. 56%

b. 62%

Explanation:

a. Janitorial costs are allocated based on square feet.

Assembly Department Square feet = 42,560

Total area for both departments = 42,560 + 33,440 = $76,000

Percentage of costs

= 42,560/ 76,000

= 56%

b. Security costs are allocated based on asset value.

Cutting Department Asset Value = $126,480

Total asset value for both departments = 77,520 + 126,480 = $204,000

Percentage of costs

= 126,480/ 204,000

= 62%

8 0
3 years ago
Salmon Inc. has debt with both a face and a market value of $227,000. This debt has a coupon rate of 7 percent and pays interest
Dahasolnce [82]

Answer:

14.27%

Explanation:

Unlevered value = [Expected earnings before interest and taxes × (1- tax rate)]/Unlevered cost of capital

Unlevered value = [$87,200 x (1- 0.35)]/0.12 = $472,333.33

Levered value = Unlevered value + (Tax rate × Debt market value)

Levered value = $472,333.33 + (0.35 x $227,000) = $551,783.33

Value of equity = Levered value - Debt market value

Value of equity = $551,783.33 - $227,000 = $324,783.33

Cost of equity = Unlevered cost of capital + [(unlevered cost of capital - coupon rate) × (Debt market value/Value of equity) × (1 - Tax rate)]

Cost of equity = 0.12 + [(0.12 - 0.07) × ($227,000/$324,783.33) × (1 - 0.35)] = 0.1427, or 14.27%

Therefore, the firm's cost of equity is 14.27%

7 0
2 years ago
2700 thousand bonds with a face value of $1000 each, are sold at 106. The entry to record the issuance is
IceJOKER [234]

Date, bonds sold at a premium

Dr Cash $28620000000

   Cr Bonds payable $2,700,000,000

   Cr Premium on bonds payable $1,62,000,000

Explanation:

The total face value of the bonds is $1,000 x 2700,000 bonds = $2,700,000,000

since the bonds were sold at 106, their price was =

$2,700,000,000 x 106% = $28620000000

the difference between the face value and the actual market price = $2,862,000,000 - $2,700,000,000 = $1,62,000,000 must be recorded as premium on bonds payable (increases the bonds' carrying value)

<h3>What is the difference between market value and face value?</h3>
  • The market value is the actual price at which the security trades on the open market, as well as the price that fluctuates when the yield reacts to changes in interest rates.
  • The face value is determined by the issuing company. It may be the value at which the firm redeems the shares at some point in the future, but there is no guarantee.

Learn more about date and the interest expense:

brainly.com/question/20038664

#SPJ4

7 0
2 years ago
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