Answer:
The current market price per share is $14.82
Explanation:
The current price of the stock can be calculated using the DDM or dividend discount model. The DDM values the stock based on the present value of the expected future dividends from the stock.
The following is the formula for the price of the stock today,
P0 = D1 / (1+r) + D2 / (1+r)^2 + ... + Dn / (1+r)^n + Terminal value
The terminal value is the cumulative value of all the future dividends calculated when the dividend growth becomes zero or constant. In case the dividend growth becomes zero, like in this case, the terminal value is calculated as follows,
Terminal value = Dividend / r
Where,
- r is the required rate of return
- Dividend is the dividend which will remain constant through out the future
So, the price of this stock today is,
P0 = 1.52 / (1+0.11) + 1.60 / (1+0.11)^2 + 1.62 / (1+0.11)^3 +
(1.65 / 0.11) / (1+0.11)^3
P0 = $14.82
Answer:
The effect of this error on 2003 ending working capital is that it overstated the ending 2003 working capital.
The error does not have effect on the 2004 ending retained earnings balance.
Explanation:
Let the amount of the commission expense be xxxx.
At the end of 2003, the journal entries should have been as follows:
Debit Commission expense for xxxx
Credie Commission payable for xxxx
Also, we have:
Working capital = Current assets – Current liabilities ………… (1)
From equation (1), current liabilities are understated because commission payable which was not recorded is an item under current liabilities. Since the current liabilities are understated, that indicates that the working capital in equation is overstated. Therefore, the effect of this error on 2003 ending working capital is that it overstated the ending 2003 working capital.
When the 2003 commission expense in the entries above was paid in 2004, it would have been recognized as an expense. This made the error to counterbalance. This implies that the 2004 ending retained earnings balance is still correct despite that there are errors in the earnings of the two years. Therefore, the error does not have effect on the 2004 ending retained earnings balance.
Answer:
$118,220
Explanation:
The Costs of Goods Sold COGS is calculated using the following formula.
COGS = Beginning inventory + purchases - Ending Inventory
For Azur company
Beginning inventory: 30,840
Ending inventory : 20,560
Net purchases equal Net purchase equal to purchases plus freight-in minus discounts freight-out are administrative expenses, hence do not feature in COGS
Net purchases =$102,800 + $15,420 -$ 10,280
Net purchases =$107,940
COGS = $30,840 +$107,940 -$20560
COGS = $118,220
Answer:
See explanation section
Explanation:
See the images to get the answer
