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ss7ja [257]
2 years ago
12

Stoneheart Group is expected to pay a dividend of $3.11 next year. The company's dividend growth rate is expected to be 4.2 perc

ent indefinitely and investors require a return of 11.4 percent on the company's stock. What is the stock price?
Business
1 answer:
lukranit [14]2 years ago
8 0

Answer:

$43.19

Explanation:

Use dividend discount model(DDM) to solve this question; specifically constant dividend growth model.

P0 = D1/(r-g)

P0 = Current price

D1 = Next year's dividend = $3.11

r = investors' required return = 11.4% or 0.114 as a decimal

g = dividend growth rate = 4.2% or 0.042 as a decimal

P0 = 3.11/(0.114 - 0.042)

P0 = $43.19

Therefore, this stock price is $43.19

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Harrison Ford Company has been approached by a new customer with an offer to purchase 10,000 units of its model IJ4 at a price o
pychu [463]

Answer:

If the offer is accepted, the income will decrease in $7,500.

Explanation:

Giving the following information:

Harrison Ford Company has been approached by a new customer with an offer to purchase 10,000 units of its model IJ4 for $5 each.

Unitary variable cost:

Direct Materials= $1.75

Direct Labor= $2.50

Variable Overhead= $1.50

1) Because it is a special offer and there is unused capacity, we will not have into account the fixed costs.

Accepting the offer:

Relevant cost= Unitary variable cost

Relevant cost= 1.75 + 2.5 + 1.50= $5.75

Relevant benefits= $5

2) Effect on income= 10,000*5 - 10,000*5.75= -$7,500

If the offer is accepted, the income will decrease in $7,500.

3 0
3 years ago
The following units of an inventory item were available for sale during the year: Beginning inventory 11 units at $51 First purc
Gennadij [26K]

Answer:

$2,338

Explanation:

For computing the ending inventory, first we have to determine the average cost per unit, then ending inventory units which are shown below:

= (Beginning inventory units × price per unit +  first purchase inventory units × price per unit + second purchase inventory units × price per unit + third purchase inventory units × price per unit) ÷ (Beginning inventory units + one purchase inventory units + second purchase inventory units + third purchase inventory units)

= (11 units × $51 + 15 units × $53 + 21 units × $55 + 17 units × $57) ÷ (11 units + 15 units + 21 units + 17 units)

= ($561 + $795 + $1,155 + $969 ) ÷ (64 units)

= ($3,480) ÷ (64 units)

= $54.375 per unit

Now the ending inventory units would be

= Available units for sale - sale units

= 64 units - 21 units

= 43 units

Now the ending inventory would be

= Ending inventory units × average cost per unit

= 43 units × $54.375 per unit

= $2,338

5 0
3 years ago
Required financial statements of funds may include the following, among others: I. Statement of net assets II. Statement of reve
Alina [70]

Answer:

option D ( ii, iii and iv )

Explanation:

Required financial statements that should be issued by governmental funds and by proprietary  funds include the following among others:

  • statement of revenues, expenditures and changes in fund balances,
  • balance sheet,
  • statement of cash flows

These among others are expected to reflect/ be included in Financial statement issued by Governmental funds and proprietary funds.

8 0
2 years ago
How much money should you save in case you have an emergency? eight months of living expenses six months of living expensestwelv
mezya [45]
Most experts believe you should have enough money in your emergency fund to cover at least 3 to 6 months' worth of living expenses.
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2 years ago
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_________ are typically responsible for planning and allocating resources to meet organizational objectives. to answer, type onl
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A. Is the answer you are looking for
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3 years ago
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