1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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

You might be interested in
One term is used to identify a collection of activities designed to gain access to personal and corporate information. The activ
tensa zangetsu [6.8K]

Answer: Social engineering

Explanation:

Social engineering is simply the use of deceit in order to manipulate individuals so that they can give out personal and confidential information about themselves which will be used for fraud.

The activities involved in social engineering are phishing, scams and hoaxes aimed at getting individuals to compromise sensitive data.

8 0
4 years ago
The financial statements of the imagine company report net sales of $1,000,000 and accounts receivable of $700,000 and $300,000
3241004551 [841]

Accounts receivable turnover is the number of times that a company collects its average account receivable per year. The ratio evaluates the ability of a company to issue credit to its customers efficiently and collect funds from them in a timely manner.  A high turnover ratio indicates a number of high-quality customers. A low turnover ratio represents a large proportion of clients having financial difficulties. It also indicates an excessive amount of bad debt.

To answer the question -- what is the accounts receivable turnover for the imagine company, use this computation:

Given:

Net Sales - $1,000,000

Beginning Account Receivable =$700,000

Ending Accounts Receivable = $300,000

Let X = Accounts Receivable Turnover

X = Net Sales ÷ ((Beginning Accounts Receivable + Ending Accounts Receivable) / 2)

X= 1,000,000/ (700,000+300,000)/2

X = 1,000,000/ (1,000,000/2)

X = 1,000,000/500,000

X = 2

<span> </span>

4 0
3 years ago
Which statement is true about the gross profit method of inventory valuation?
Travka [436]

Answer:

b. It may be used to estimate inventories for interim statements.

Explanation:

As we know that

Gross profit = Sales - the cost of goods sold

By doing the inventory valuation through the gross profit method, it estimated inventories for interim statements as these statements are covering the financial information that is less than a year so that the proper analysis could be made and in this, no auditing is required.  

Therefore, for interim statements, the gross profit method is required.  

 

6 0
3 years ago
Which one of the following statements would generally be considered as accurate given independent projects with conventional cas
vladimir1956 [14]

A project's profitability index of.85 indicates that: (Hint: Apply the IRR formula: ICO = discounted cash flows with a desired IRR of 8%.) $16,775.

What exactly is a traditional project?

Standard project. a project that will likely experience one or more future positive cash flows after experiencing a negative initial cash flow ( conventional cash inflows)

What is a non-standard project?

It was first used to refer to "non-conventional" projects or "projects having non-conventional cash flows." The internal rate of return (IRR), which was demonstrated to have different values or not exist at all in some projects, was introduced into economic literature after that. If a project just involves one cash change, it is deemed conventional.

To know more about conventional cash inflows visit:-

brainly.com/question/28790140

#SPJ4

3 0
1 year ago
Northern Pacific Fixtures Corporation sells a single product for $28 per unit. If variable expenses are 65% of sales and fixed e
sveta [45]

Answer:

Break even point in dollars = $28,000

Explanation:

We know Sales - Variable Cost = Contribution

Thus, if we are provided that Variable expenses = 65% then contribution = 100 - 65 = 35%

Also provided selling price per unit = $28

Contribution Therefore = $28 \times 35% = $9.80

Break even point in dollars = \frac{Fixed\: Cost}{Contribution\: Margin}

Here, fixed cost = $9,800

Contribution margin = 35%

Putting values in above formula we have,

Break even point in dollars = \frac{9,800}{0.35} = $28,000

3 0
3 years ago
Read 2 more answers
Other questions:
  • Bo's Home Manufacturing has 410,000 shares outstanding that sell for $46.86 per share. The company has announced that it will re
    11·1 answer
  • Historically, if an organization and employee do not have a specific employment contract, the employer or employee may not requi
    11·1 answer
  • Logistics Solutions provides order fulfillment services for dot merchants. The company maintains warehouses that stock items car
    7·1 answer
  • From an economics​ perspective, to determine whether to serve breakfast all​ day, mcdonald's should
    11·1 answer
  • Hutchinson Corporation has zero debt ⎯it is financed only with common equity. Its total assets are $410,000. The new CFO wants t
    6·1 answer
  • Suppose that the demand for loanable funds for car loans in the milwaukee area is $10 million per month at an interest rate of 1
    14·1 answer
  • Appropriations to retained earnings are..<br><br>It is not option C.
    9·1 answer
  • A company carefully defines its target market. Now the company will be able to focus on people with a preexisting need or intere
    7·1 answer
  • Advantages and Disadvantages of GMO and non modified pumpkins? One paragraph
    5·1 answer
  • 3 tips you give someone who is about to invest their money<br> for the first time
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!