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natulia [17]
3 years ago
6

Schnusenberg Corporation just paid a dividend of D0 = $0.75 per share, and that dividend is expected to grow at a constant rate

of 6.50% per year in the future. The company's beta is 0.75, the required return on the market is 10.50%, and the risk-free rate is 4.50%. What is the company's current stock price? Do not round intermediate calculations. a. $27.80 b. $33.23 c. $31.63 d. $28.76 e. $31.95
Business
1 answer:
olga_2 [115]3 years ago
7 0

Answer:

Option E is correct

Price of share = $31.95

Explanation:

The price of the share is the future dividend  discounted at the required rate of return .

The required rate of return is the cost of equity . The cost of equity is computed as follows:

Cost of equity = Rf + β(Rm-Rf)

Rf= 4.50, Rm= 10.50, β= 0,75

Ke= 4.50% + 0.75×(10.50-4.50)

Ke= 9%

Price of share = Do×(1+g)/(Ke-g)

Price of the share = 0.75 × (1.065)/(0.09-0.065)

                             = 31.95

Price of share = $31.95

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Define return( rate of return).​
elena-14-01-66 [18.8K]

Answer:

its returning the rate that was given out

i guess i jus gave it a try

6 0
2 years ago
Other financial data for the year ended December 31, 2019: Included in accounts receivable is $1,200,000 due from a customer and
Kipish [7]

Answer:

$5,055,000

Explanation:

Note: <em>The full question is attached below</em>

<em />

Particulars                                                                    Amount

Cash                                                                            $875,000

Accounts receivable                          $2,695,000  

Less: Installments not due in 2021   <u>($600,000)</u>      $2,095,000

[$1,200,000 - ($150,000 * 4)]  

Inventory                                                                      <u>$2,085,000</u>

Total of current assets                                               <u>$5,055,000</u>

5 0
2 years ago
1. Which of the following ratios use de-levered net income? (check all that apply)
notka56 [123]

Answer:

The ROA (Return on Assets) and the Return on Sales are the ratios which use the de-levered net income.

Explanation:

The shareholders want to evaluate or measure the return without any effects of the interest expense. De- levered net income is required to alter the net income so that it can be added back it to the interest expense.

The ratio which using De-levered net income are the ROA that is Return on assets and the Return on Sales because it is used to measure the return.

6 0
3 years ago
All-Star Enterprises purchased a machine on January 1. The company uses straight-line depreciation for financial reporting and a
maks197457 [2]

The amount that will be recorded as a deferred tax liability during the year is $10800.

<h3>How to calculate the tax liability?</h3>

From the information given, the depreciation for tax purposes during the year was $36,000 greater than depreciation for financial reporting and a 30% tax rate will apply in the future.

Therefore, the amount that will be recorded as a deferred tax liability during the year will be:

= 30% × $3600

= 0.3 × $36000

= $10800

Learn more about tax on:

brainly.com/question/25783927

#SPJ1

3 0
1 year ago
Record the following selected transactions for April in a two-column journal, identifying each entry by letter: (put letter into
hodyreva [135]

Answer:

Required 1.

a.

Cash $18,000 (debit)

Capital $18,000 (credit)

b.

Equipment $27,000 (debit)

Cash $10,000 (credit)

Note Payable $17,000 (credit)

c.

Rent Expense $2,300 (debit)

Cash $2,300 (credit)

d.

Supplies $1,500 (debit)

Trade Payable $1,500 (credit)

e.

Trade Receivable $9,800 (debit)

Revenue $9,800 (credit)

f.

Cash $7,500 (debit)

Revenue $7,500 (credit)

g.

Trade Payable $1,200 (debit)

Cash $1,200 (credit)

h.

Wages $3,425 (debit)

Cash $3,425 (credit)

i.

Cash $7,900 (debit)

Trade Receivables $7,900 (credit)

j.

Capital $1,875 (debit)

Cash $1,875 (credit)

Required 2.

Cash  = $14,600  (debit)

Capital =  $16,125 (credit)

Equipment = $27,000 (debit)

Note Payable = $17,000 (credit)

Rent Expense = $2,300 (debit)

Supplies = $1,500 (debit)

Trade Payable =  $300 (credit)

Trade Receivable  = $1,900 (debit)

Revenue  = $17,300 (credit)

Wages =  $3,425 (debit)

Required 3.

                                 Debit               Credit

Cash                       $14,600  

Capital                                             $16,125

Equipment            $27,000

Note Payable                                 $17,000

Rent Expense        $2,300

Supplies                  $1,500

Trade Payable                                   $300

Trade Receivable   $1,900

Revenue                                        $17,300

Wages                    $3,425

Totals                     $50,725         $50,725

Explanation:

Account Balance Calculations :

Cash = $18,000 - $10,000 - $2,300 + $7,500 - $1,200 - $3,425 + $7,900 -$1,875 = $14,600  (debit)

Capital = $18,000 - $1,875 = $16,125(credit)

Equipment = $27,000 (debit)

Cash =  (credit)

Note Payable = $17,000 (credit)

Rent Expense = $2,300 (debit)

Supplies = $1,500 (debit)

Trade Payable = $1,500 - $1,200 = $300 (credit)

Trade Receivable = $9,800 - $7,900 = $1,900 (debit)

Revenue = $9,800 + $7,500 = $17,300(credit)

Wages =  $3,425 (debit)

3 0
3 years ago
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