Whole Grain Bakery purchases an industrial bread machine for $24,500. In addition to the purchase price, the company makes the f
1 answer:
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Answer:
the intrinsic value of the stock is 42.97
If the stock is priced at 40 dollars it would be a good idea to purchase the share as will provide a better yield than the cost of capital of 9.6%
Explanation:
First, we solve for the cost of equity using the CAPM:
risk free = 0.03
market rate = 0.09
premium market = (market rate - risk free) = 0.055
beta(non diversifiable risk) = 1.2
Ke = 0.09600
<em>Now we solve for the intrinsic price using the gordon model</em>
<em>with multi-stage growth:</em>
First, we calcualte the future dividends
grow rate Dividends
0 1.25
1 0.25 1.5625
2 0.25 1.953125
3 0.25 2.44140625
4 0.25 3.051757813
4 0.03 3.143310547
Now in the last year, we calcualte using the gordon model or constant grow:
32.7128182
Now we calculate and add together the present value of each of this future cash flow to determnate the intrinsic value ofthe share:
Present Value
1 1.5625 / (1+0.096)^1 = 1.425638686
2 1.953125 / (1+0.096)^2 = 1.625956531
and so on, giving the following values:
3 1.854421226
4 2.114987712
present value of the future dividends at 3% 22.67126448
<u>Finally we add them and get:</u>
42.97160726
Complete Question:
PB10-2 Recording and Reporting Current Liabilities with Evaluation of Effects on the Debt-to-Assets Ratio [LO 10-2, LO 10-5]
Tiger Company completed the following transactions. The annual accounting period ends December 31.
Jan. 3 Purchased merchandise on account at a cost of $24,000. (Assume a perpetual inventory system.) Jan.
27 Paid for the January 3 purchase.
Apr. 1 Received $80,000 from Atlantic Bank after signing a 12-month, 5 percent promissory note.
June 13 Purchased merchandise on account at a cost of $8,000.
July 25 Paid for the June 13 purchase.
July 31 Rented out a small office in a building owned by Tiger Company and collected eight months’ rent in advance amounting to $8,000.
Dec. 31 Determined wages of $12,000 were earned but not yet paid on December 31 (Ignore payroll taxes).
Dec. 31 Adjusted the accounts at year-end, relating to interest.
Dec. 31 Adjusted the accounts at year-end, relating to rent.
Required:
1. & 2. Prepare journal entries for each of the transactions through August 1 and any adjusting entries required on December 31.
3. Show how all of the liabilities arising from these items are reported on the balance sheet at December 31.
Answer:
Prepared journal Entries for Questions 1, 2 and 3 are attached as images in this order
1 Journal Entry Worksheet 1 (image 1)
2 Journal Entry Worksheet 1 (image 2)
3 Journal Entry Balance sheet 1 (image 3)
A subordinate should have the ability to manage the organization's workforce as a leader. The subordinates' impression of their talents is an important personal quality.
<h3>What is the path-goal leadership theory?</h3>
According to the path-goal theory, a leader's conduct is influenced by their employees' satisfaction, motivation, and performance. The manager's task is considered as improving employees ’ performance in choosing the best pathways to achieve both their own and the company's goal.
- Inclusive leaders,
- follower traits,
- task characteristics, and
- motivation is all aspects of the path-goal theory
As a result, the two most important personal characteristics of subordinates in the theory. for example locus of control and abilities perception.
Learn more about Path goal theory:
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