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mihalych1998 [28]
3 years ago
9

Charles Berkeley, Inc. just paid an annual dividend of $3.60 per share on its stock. The dividends are expected to grow at a con

stant rate of 4.5 percent per year, indefinitely. If investors require an 11 percent return on this stock, what will the price be in 12 years? Question 2 options: A. $91.71 B. $93.62 C. $95.75 D. $98.15 E. $102.57.
Business
1 answer:
8_murik_8 [283]3 years ago
5 0

Answer:

D. $98.15

Explanation:

Price of stock formula;

Price today(P0) = \frac{D0(1+g)}{r-g}

D0= Current dividend

g = growth rate

r = required return

Price = \frac{3.60(1.045)}{0.11 -0.045}

= 3.762 /0.065

Price = 57.877

Price in 12 years (P12) = P0(1+g)

P12 = 57.877 *1.045^{12}

P12 =$98.152

Therefore, price of stock in 12 years will be $98.15

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Analysis of Accounts Receivable and Allowance for Doubtful Accounts Steelcase, Inc. reported the following amounts in its 2014 a
Naddika [18.5K]

Answer:

b. Gross Receivable = Net receivable +Allowance

2014 = $306.8 + $13 = $319.80

2013 = $287.3 + $14.5 = $301.8

Allowance as a % of Gross receivable = Allowance / Gross receivable

2014 = $13/319.80 = 0.041 =  4.1%

2013 = $14.5/301.8 = 0.015 = 1.5%

c. Average Net Accounts receivable = (Accounts receivable, net 2014 + Accounts receivable, net 2013) / 2 = ($306.8 + $287.3] / 2 = $297.05

Receivable Turnover = Net credit sales / Average Net Accounts receivable

Receivable Turnover = $2,989 / $297.05

Receivable Turnover = 10.06 Times

d) Cash received in 2014 = Beginning Gross receivables + Net sales - Ending Gross receivables-Adjustment in allowance (Write-off 2014)

Cash received in 2014 = $301.8 + $2,989 - $319.8 - $4.3

Cash received in 2014 = $2,966.7

Increase in customer deposits = $16 - 13.5 = $2.5

Total Cash received from customers in 2014 = Cash received in 2014 + Increase in customer deposits

Total Cash received from customers in 2014 = $2,966.7 + $2.5

Total Cash received from customers in 2014 = $2969.20

6 0
3 years ago
The taxes imposed under the social security act consist of:
inysia [295]
Two taxes on employers, two taxes on employees, OASDI and HI taxes and taxes on the net earnings of the self-employed 
3 0
2 years ago
firm purchased copper pipes a few years ago at ​$10 per pipe and stored​ them, using them only as the need arises. The firm coul
Lostsunrise [7]

Answer:

The opportunity cost of each pipe and what is the sunk​ cost is $77 and $67 per pipe respectively.

Explanation:

Opportunity cost: The opportunity cost is that cost which is incurred to choose the best options with the available options.

Sunk cost: The sunk cost is that cost which is not recovered in the future. Its other name is the past cost. It does not help to make future decisions as if it is incurred then it cannot be recovered again

So, the opportunity would be the current price i.e $77

And, the sunk cost is $67 per pipe ($77 - $10)

7 0
2 years ago
A company with high ebit is considering pursuing multiple projects next year. which trade-off is involved, and what is the ideal
strojnjashka [21]

A company with high EBIT is considering pursuing multiple projects next year. The trade-off involved will be maximizing the number of projects against a higher credit rating, with an A rating being ideal. Thus the correct answer is D.

<h3>What is a trade-off?</h3>

The trade-off is referred as a situation when one object gets compromised to gain over another object. This situation comes when decision-making between two goods takes place and one will get selected over the other.

Increasing the number of projects is compromised for a superior credit rating. A strong credit rating won't be enough since more projects will require the business to heavily rely on financing. The A credit rating will be considered.

Therefore, option D is appropriate.

Learn more about trade-off, here:

brainly.com/question/10895386

#SPJ1

The complete question is-

A company with high EBIT is considering pursuing multiple projects next year. Which trade-off is involved, and what is the ideal credit rating for the company between AAA, AA, A, and BBB?

Select an answer:

The trade-off is only being able to pursue a few of the projects against a lower credit rating, with an AA rating being ideal.

The trade-off is pursuing more new projects against a lower WACC, with a AAA rating being ideal.

The trade-off is the risk of a credit downgrade against having few new projects, with a BBB rating as ideal.

The trade-off is maximizing the number of projects against a higher credit rating, with an A rating being ideal.

5 0
1 year ago
THREE reasons except politics for the looting of shops,malls and the destruction of business property in GAUTENG and KwaZulu Nat
Helga [31]

Answer:

poverty,lack of AQ,others do it for fun

8 0
2 years ago
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