Answer:
The price per share should be $22.5
Explanation:
The price earnings multiple or P/E tells us how much price the investors are willing to pay for $1 earnings of the company.
We first need to calculate the earnings per share of the company.
Earnings per share = Net Income / Number of outstanding common shares
Earnings per share = 1500000 / 1000000 = $1.5 per share
Using the P/E for the industry, the price per share of Flintstone should be,
P/E = Price per share / Earnings per share
15 = Price per share / 1.5
15 * 1.5 = Price per share
Price per Share = $22.5
Answer:
substitution effect The supply curve slopes upward because at a higher price, producers have an incentive to produce more.
Explanation: Google
This is perceived value, making the check ups free increases the value.
Answer:
a. What is the pretax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the aftertax cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Explanation:
we must first determine the bond's yield to maturity:
YTM = {coupon + [(face value - market value)/n]} / [(face value + market value)/2] = {30 + [(1,000 - 930)/60]} / [(1,000 + 930)/2] = 31.17 / 965 = 3.23% x 2 = 6.46%
after tax cost of debt = 6.46% x (1 - tax rate) = 6.46% x (1 - 22%) = 6.46% x 78% = 5.04%
