1. The ABC Company is producing an item at unit cost of birr 4.

The Perfect Rose Co. has earnings of $3.18 per share. The benchmark PE for the company is 18. a. What stock price would you cons

d1i1m1o1n [39]

Answer:

a. $3.18 x 18 = $57.24

b. $3.18 x 21 = $66.78

Explanation:

PE ratio is Price-to-earning ratio which is a quick and widely-used ratio to determine a compay stock's price.

PE ratio of a company stock is determined as the current market price of a company stock divided by earning per stock of a company which is total profit of a company divided by total number of outstanding common share.

To determine the valued stock is undervalued or overvalued, usually there is a benchmark PE which is the PE of its comparison company or of the index ( e.g: company within the same industry, Dow Jones index). If the PE of a valued stock is higher than its comparision meaning the valued stock is overvalued and vice versa.

The underlying concept is that a valued stock should be of the same value as the comparison stock as we compare the profit per common share the two stocks bring about.

PE ration is a quick, yet too simple to be applied alone in stock valuation as the approach ignore many material factors in stock valuation such as cashflow of the firm, the inherit of the valued company.

4 0

3 years ago

Current operating income for Bay Area Cycles Co. is $52,000. Selling price per unit is $100, the contribution margin ratio is 20

Misha Larkins [42]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

The current operating income for Bay Area Cycles Co. is $52,000. The selling price per unit is $100, the contribution margin ratio is 20%, and fixed expense is $208,000.

Break-even point= fixed costs/ contribution margin

Break-even point= Break-even point (dollars)/ selling price

Break-even point= 1,040,000/100= 10,400 units

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 208,000/ 0.20= $1,040,000

Current sales level= 52,000 + 208,000= $260,000

Margin of safety in untis= 2,600 - 10,400= - 7,800 units

Margin of safety ratio= -7,800/2,600= -300%

6 0

3 years ago

The innovation strategy for changing products and technologies that involves designing the organization to encourage creativity

Elenna [48]

The innovation strategy for changing products and technologies that involves designing the organization to encourage creativity and the initiation of new ideas is known as exploration.

Creativity is the generation of novel ideas that can satisfy a perceived need or respond to an organizational opportunity. An innovation strategy for changing products and technologies in which organizations are designed to encourage creativity and the initiation of new ideas is called exploration.

Exploration encourages creativity and the development of new ideas, and Exploitation transforms those ideas into the manufacturing of everyday products. Organizational change is defined as the adoption of new ideas and behaviors by an organization.

The adoption of ideas and behaviors that are new to an organization's industry, market, or general environment is called organizational innovation.

Learn more about exploration here: brainly.com/question/26167590

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3 0

2 years ago

What type of application control is used on the field “base unit of measure”?

8090 [49]

The answer to your question would be Validity Check because only a fixed limited set of values are allowed. Hoped this helped

5 0

3 years ago

A cpa examines a sample of copies of december and january sales invoices for the initials of the person who verified the quantit

artcher [175]

A CPA examines a sample of copies of December and January sales invoices for the initials of the person who verified the quantitative data. This is an example of a Test of a control

<h3>What is the Test of a control?</h3>

Any auditing technique used to assess an organization's internal controls is known as a test of control.
Determining if these internal controls are adequate to identify or reduce the risk of material misstatements is the goal of control tests in auditing.
For instance, the auditor is working on the audit of ABC's financial accounts and it will begin very soon.
Normally, the auditor must complete audit preparation and get audit partner approval before proceeding with the substantive test or conducting fieldwork.

To learn more about Risk management, refer to the following link:

brainly.com/question/13760012

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4 0

2 years ago