Answer:
a. 7.71%
b. $57.57
Explanation:
a. The computation of discount rate is shown below:-
Discount rate = Risk free rate of return + Market Risk Premium × Beta
Here Common stock will have the same market risk as S&P 500 i.e Beta of Common Stock is 1
= 1.5% + 7.6 × 1
= 7.71%
b. The computation of stock price is shown below:-
Stock price = Expected Stock Value at year End ÷ (1+ Discount rate) + Expected Dividend ÷ (1 + Discount Rate)
= $60 ÷ (1 + 7.71%) + $2 ÷ (1 + 7.71%)
= $60 ÷ 1.0771 + 2 ÷ 1.0771
= $55.71 + $1.86
= $57.57
Name the device that are to measure volume of a liquid
Answer:
$816,000
Explanation:
Little company's income was for 864,000
We also have, amortization related to Little company for 48,000
we will decrease the income from Little company by this amount
giving a net result of 816,000
The dividends do not impact net income.
The Big Company transactions do not impact on the Little company net income unless we are provided otherwise.
We are not given any information of rtansactions intra-entity so we can conclude thats the consolidades earning for Little Company.
Answer:
$32
Explanation:
The incremental cost:
Direct materials +Direct labor +Variable manufacturing overhead
$12 + $8 + $12 = $32
The maximum price Olive Corp. should pay the outside supplier is $32.
Fixed manufacturing overhead was not included because it is not relevant to the decision.
Answer:
Equipment is an _asset__ account. It is reported on the _left_ side of the accounting equation and is __increased__ when equipment is purchased
Explanation:
Buying more Equipment is an asset to company in the sense that it helps in boosting the company production output and in turn generating more profit. It is reported on the left side of the company accounting equation. The aggregate equation increases as the number of equipment purchase increases.
