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Bas_tet [7]
3 years ago
8

Two constant growth stocks are in equilibrium, have the same price, and have the same required rate of return. Which of the foll

owing statements is CORRECT?a. The two stocks must have the same dividend per share.b. If one stock has a higher dividend yield, it must also have a lower dividend growth rate.c. The two stocks must have the same dividend yield.d. The two stocks must have the same dividend growth rate.e. If one stock has a higher dividend yield, it must also have a higher dividend growth rate.
Business
1 answer:
Assoli18 [71]3 years ago
7 0

Answer:

B: If one stock has a higher dividend yield, it must also have a lower dividend growth rate

Explanation:

A constant growth stock is valued using the formula:

P0 = \frac{D1}{ke-g}

from this formula,  holding other things constant, a higher D1 value would decrease P0, whilst a lower g value would have an effect of lowering P0.

For the two stocks to be in equilibrium, since we are not specifically  told that the two stocks have the same growth rate [ the question simply says the growth rate is constant...meaning it is not expected to change], it thus follows that if one one stock has a higher dividend value ( which would  increase the price if all other variables are not changed), it must also have a lower dividend growth rate, which would have the opposing effect, thus keeping the two stocks in equilibrium.

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fall

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Explanation:

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A fall in the price of steel would reduce the cost of producing cars and thus increase the production of cars. as a result, more labour would be employed to make cars.

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How is globalization affecting the hospitality industry? Give specific examples of some of the changes.
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3 years ago
________ capital is the economic or productive potential of employee knowledge and actions.
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7 0
3 years ago
Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below.
OleMash [197]

Answer:

1. Material cost variance                            $

Standard material cost ($6  x  4,300)  25,800

Less: Actual ,aterial cost                       27,900

Material cost variance                            2,100(A)

2. Material price variance

= (Standard price - Actual price) x Actual quantity purchased

= ($6 - $6.20) x 4,500 pounds

= $900( A)

Actual price

=  Actual material cost/Actual quantity purchased

Actual price

= $27,900/4,500 pounds = $6.20

3. Material usage variance

= (Standard quantity - Actual quantity used) x Standard price

= (1 x 4,300 - 4,500) x $6

= $1,200(A)

4. Labour cost variance:                           $

Standard labour cost ($18.30 x 4,300)   78,690

Less: Actual labour cost                          77,500

Labour cost variance                                1,190

5. Labour rate variance

=(Standard rate - Actual rate) x Actual hours worked

= ($12.20 - $12.40) x 6,250 hours

= $1,250(A)

6. Labour efficiency variance

= (Standard hours - actual hours worked) x Standard rate

= (1.50 hours x 4,300 - 6,250) x $12.20

= $2,440(F)

Actual rate = Actual labour cost/Actual hours worked

Actual rate = $77,500/6,250 hours

Actual rate = $12.40

= (SR - AR) x Actual hour worked

7. Total overhead variance                                  $

 Standard overhead cost ($24 x 4,300)          103,200

Less: Actual overhead cost(78,430+ 26,670)  105,100

Total overhead variance                                     1,900

Less: Actual overhead cost

Explanation:

Material cost variance is the difference between standard material cost and actual material cost.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Material price variance is the difference between standard price and actual price multiplied by actual quantity purchased.

Material usage variance is the difference between standard quantity and actual quantity used multiplied by standard price.

Labour cost variance is the difference between standard labour cost and actual labour cost.

Labour rate variance is the difference between standard rate and actual rate multiplied by actual hours worked.

Labour efficiency variance is the difference between standard hours and actual hours worked multiplied by standard rate.

Total overhead variance is the difference between standard total overhead cost and actual total overhead cost.

7 0
3 years ago
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