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grin007 [14]
3 years ago
5

Johnson Enterprises intends to make a dividend payment of $3.25 per share next year. After this dividend payment, the firm is co

mmited to raise its dividend by 5.1 percent per year, forever. Assuming you require a return of 15 percent on this investment, how much would you be willing to pay for this stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
vladimir1956 [14]3 years ago
6 0

Answer:

I would be willing to pay $ 32.83  for each share of Johnson Enterprises

Explanation:

The price per share= next year dividend/required rate of return-growth rate

next year dividend is $3.25

required rate of return is 15%

dividend growth rate in perpetuity is 5.1%

share price=$3.25/(15%-5.1%)

share price =$3.25/9.9%

share price=$3.25/0.099

share price=$ 32.83  

The share can be sold today for $ 32.83  ,which is the present value of dividends payable in perpetuity(forever)

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I would go with C because you need to hear the other person
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You want to create a portfolio equally as risky as the market, and you have $500,000 to invest. Information about the possible i
azamat

Answer:

Investment in stock C is $122450.3311 rounded off to $122450.33

Explanation:

A portfolio which is equally as risky as market should have a beta equal to the beta of the market as beta is a measure of the riskiness. The beta of market is always equal to 1. The formula for beta of a portfolio is as follows:

Portfolio beta = wA * Beta A + wB * Beta B + ... + wN * Beta N

Where w represents the weight of each stock in the portfolio.

Let investment in stock C be x

1 = 146000/500000 * 0.91 + 134000/500000 * 1.36 + x/500000 * 1.51

1 = 0.26572  +  0.36448 + 1.51x / 500000

1 - 0.6302 = 1.51x / 500000

0.3698 * 500000 = 1.51x

1844900 / 1.51 = x

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4 0
3 years ago
Andy Grove, former CEO and cofounder of Intel, encouraged openness by not having many of the trappings of success. This is an ex
AlladinOne [14]

Answer:

Andy Grove, former CEO and cofounder of Intel, encouraged openness by not having many of the trappings of success. This is an example of evolving from boundaries to rewards and culture byA) hiring people who identify with the dominant values of the organization.B) developing managerial role models.C) maximizing training and indoctrination.D) aligning rules with organizational goals and objectives.

Answer is B

Explanation:

Explanation: In most environments, organizations should strive to provide a system of rewards and incentives, coupled with a culture strong enough that boundaries become internalized. This includes hiring people who identify with the dominant values of the organization and have consistent attributes, training, managerial role models, and reward systems that are clearly aligned with the organizational goals and objectives.

3 0
3 years ago
Daley Company prepared the following aging of receivables analysis at December 31. Days Past Due Total 0 1 to 30 31 to 60 61 to
Mariulka [41]

Answer:

a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 4% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method.

Dr Bad Debt Expense $ 23.000

Cr Allowance for Uncollectible Accounts $ 23.000

b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a.  

Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $12,100 credit  

Dr Bad Debt Expense $ 5.720

Cr Allowance for Uncollectible Accounts $ 5.720

c. Prepare the adjusting entry to record bad debts expense using the estimate from part a.  

Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $1,100 debit.  

Dr Bad Debt Expense $ 18.920

Cr Allowance for Uncollectible Accounts $ 18.920

Explanation:

Total Accounts Receivable $575,000 * 4% = $23,000

Dr Bad Debt Expense $ 23,000

Cr Allowance for Uncollectible Accounts $ 23,000

========================================================

$397,000  2%  $7,940  Past Due 0 days

$91,000    3%  $2,730  Past Due 1-30 days

$37,000    6%  $2,220  Past Due 31-60 days

$19,000    8%  $1,520  Past due 61-90 days

$31,000     11%  $3,410  Over 90 days

$575,000    $17,820  

If the unadjusted balance in the Allowance for Doubtful Accounts is a $12,100 credit then:

$17,820 - $12,100 = $5,720

Dr Bad Debt Expense $ 5,720

Cr Allowance for Uncollectible Accounts $ 5,720

Because the company already has a CREDIT balance in the Allowance for Doubtful Accounts it's necessary to register an entry that complement the existing value and reflect the total balance as calculated.

==============================================================

If the unadjusted balance in the Allowance for Doubtful Accounts is a $1,100 debit.

$17,820 + $1,100 = $18,920

Because the company already has a DEBIT balance in the Allowance for Doubtful Accounts it's necessary to register an entry that compensate the existing value and reflect the total balance as calculated.

Dr Bad Debt Expense $ 18,920

Cr Allowance for Uncollectible Accounts $ 18,920

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