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Lisa [10]
2 years ago
7

Assume the firm’s dividend payment is $0.18, and that the required rate of return for the firm’s industry is 10.1%. What is the

market value of firm’s shares under the Dividend Discount Model? Group of answer choices $18.30 $17.77 $1.78 $1.83
Business
1 answer:
aleksandr82 [10.1K]2 years ago
7 0

Answer:

the market value of the share is $1.78

Explanation:

The computation of the market value of the firm under the dividend discount model is shown below:

The Market value of the share is

= Dividend Payment ÷ Required return

= $0.18 ÷ 10.1%

= $1.78

Hence, the market value of the share is $1.78

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's
Svetlanka [38]

Answer:

Variable cost per unit= $0.10

Explanation:

Giving the following information:

Cost Machine Hours

March $3,106 15,176

April 2,668 9,558

May 2,892 11,947

June 3,538 17,899

<u>To calculate the variable cost under the high-low method, we need to use the following formula:</u>

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (3,583 - 2,668) / (17,899 - 9,558)

Variable cost per unit= $0.10

8 0
3 years ago
Damon Co. purchased 100% of the outstanding common stock of Smith Co. in an acquisition by issuing 20,000 shares of its $1 par c
Tamiku [17]

Answer: the correct answer is $70000

Explanation: the fair value of the shares given plus the fair value of the contingent consideration is the total amount paid by the buyer which is (20000 shares * $10 price per share) = $200000+$10000= $210000.

The gain of the transaction is registered as the net fair value of the acquiree that is $350000-$70000= $280000 less the sum paid by the Acquirer that is $280000-$210000= $70000.

The $15000 in direct acquisition costs are registered as period expenses and not relevant for the calculation of the gain of the transaction.

8 0
3 years ago
You founded your own firm three years ago. You initially contributed $200,000 of your own money and in return you received 2 mil
hammer [34]

Answer:

B: 40%

Explanation:

Total shares = 2 + 1 + 2 = 5 million

percentage owned by me = 2/5 *100 = 40%

8 0
3 years ago
Smith &amp; Sons obtained a patent for a new optical scanning device. The fees incurred to file for the patent and to defend the
Tatiana [17]

Answer:

$3,750                            

Explanation:

Cost of patent             $45,000

Useful Life                       12

Amortization Expense for 2nd year =$3,750 (45,000/12)

Amortization Expense-Patent  Dr.$3,750

Accumulated Amortization-Patent  Cr.$3,750

4 0
2 years ago
Wember Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The
natulia [17]

Answer:

Standard cost Supplies= $3,480

Explanation:

Giving the following information:

The cost formula for catering supplies is $400 per month plus $82 per job plus $10 per meal.

The company expected its activity in September to be 20 jobs and 144 meals.

<u>To calculate the total budgeted cost, we need to multiply the standard cost for the planned production:</u>

Standard cost Supplies= 400 + (82*20) + (10*144)

Standard cost Supplies= $3,480

4 0
3 years ago
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