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Makovka662 [10]
3 years ago
6

Galaxy Air, previously a no-growth firm, has two million shares outstanding. Until now, it consistently earned $20 million per y

ear on its assets. (It has no debt and pays out all earnings as dividends. Its cost of capital is 10 percent.) Due to its newly appointed CEO, Galaxy Air is now able to squeeze out 1 percent annual growth by plowing back 5 percent of earnings. Calculate its stock price per share
Business
1 answer:
stellarik [79]3 years ago
6 0

Answer: $106.61

Explanation:

The following can be deduced from the information given:

Net Income = $20

Weighted Average no. of shares = 2

Earning per share (EPS) = $20/2 = $10

DPS =(100% - 5%) of EPS

= 95% × $10 = $9.5

Growth Rate (g) = 1%

Cost of equity (Ke) = 10%

DPS1 = [9.5 × (1+0.01)] = 9.595

Price of Stock will now be

= Po = DPS1/(Ke-g)

= 9.595/(0.10-0.01)

= 106.61

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Which of the following defines a compound tariff? A fixed amount of money per unit combined with a fixed percentage of the value
Snezhnost [94]

Answer:

A fixed amount of money per unit combined with a fixed percentage of the value of the imported product .

Explanation:

The composite tariff has always been a mixture of both the basic tax duty and the value tariff. The composition of the compound tariff requires a particular duty for each portion of the product and a part of the import duty. it does not only improve sales elasticity of the firm, but also provide further additional protection for domestic businesses.

4 0
3 years ago
With a newspaper headline suggesting additional health benefits from eating apples, based on the change in demand in the apple m
Fofino [41]

We can actually deduce here that based on the change in demand in the apple market, price and quantity will change in such a way that the price and quantity will increase.

<h3>What is change in demand?</h3>

Change in demand actually refers to the way that the demand on goods and services change as result of price increment or decrease or other factors.

We see that if the demand for apples increase as a result of the additional health benefits, the price and quantity will also increase.

Learn more about change in demand on brainly.com/question/4371942

#SPJ12

8 0
2 years ago
The CEO of a large company asks the sales manager to report the sales figures of the previous quarter. The manager immediately s
cluponka [151]

Answer:

More than what is required.

Explanation:

When the CEO asked for the sales figures, she would have wanted just the monetary value of the sales made in that period. Instead the sales manager sent the list of products sent in the previous period. This will include detailed breakdown of the number of each product sold along with the amounts at which they were sold.

In this case the sales manager sent more information than was requested by the CEO.

6 0
3 years ago
Bernie Company sells buttons to fabric stores. Sales are expected to be $2,046,299 in January, $2,484,001 in February and $3,162
Igoryamba

Answer:

$1,701,371

Explanation:

Gross Profit = Sales - Cost of Sales

therefore,

In percentage this equation can be expressed according to the Company policy as :

<em>46 % = 146 % - 100%</em>

Cost of Sales = 100/146 x $2,484,001 = $1,701,371

Conclusion :

Budgeted cost of goods sold for February is $1,701,371

3 0
3 years ago
GE buys back 300,000 shares of its stock from investors at $45 a share. Two years later it reissues this stock for $65 a share.
neonofarm [45]

Answer:

The correct answer is Option A.

Explanation:

Treasury stocks are simply company's own stock repurchased by the company. When this happens, there is cash outflow in order to increase the stock.

When GE bought back 300,000 shares of its stock from investors at $45 a share, the value of the treasury stock was 300,000 shares x $45 = $13.5m. However, the stock was reissued for $65 a share, translating to 300,000 shares x $65 = $19.5m cash receipt.

The appropriate entries to raise would be a debit to cash for $19.5 million, a credit to Treasury Stock for $13.5 million, and a credit to Additional Paid-in Capital for $6 million.

4 0
3 years ago
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