Answer:
$236.25
Explanation:
Given that,
Recently dividend paid, D0 = $6.75
Growth rate of dividend, g = 5 percent per year
Required rate of return, rr = 8 percent
Therefore, the stock price is calculated as follows:
= [D0 × (1 + g)] ÷ (rr - g)
= [6.75 × (1+5%)] ÷ (8% - 5%)
= $236.25
Hence, the maximum you would be willing to pay for a share of its common stock if your required rate of return is 8 percent is $236.25.
Answer:
$4,710
Explanation:
The computation of bad debts expense adjusting entry is shown below:-
Bad debts expense adjusting entry = Sales + Uncollectible allowances - Balance in allowance for doubtful accounts
= ($1,175,000 × 0.5%) - $1,165
= $5,875 - $1,165
= $4,710
Therefore for computing the bad debts expense adjusting entry we simply applied the above formula.
The adjusting entry is shown below:-
Bad Debt A/c Dr, $4,710
To Allowance for Doubtful Debts $4,710
(Being bad debt account is recorded)
Answer: 50% of the profit and share equal management.
Explanation:
Since the agreement is silent as to management and profits, Skip should receive 50% of the profit and share equal management.
It should be noted that when profit sharing and the management related isn't defined, profits and management will be divided equally among the partners. Therefore, in this case, profit will be shared equally.
