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valentinak56 [21]
3 years ago
12

Suppose you purchase one share of the stock of Red Devil Corporation at the beginning of year 1 for $42.50. At the end of year 1

, you receive a dividend of $2, and buy one more share for $46.50. At the end of year 2, you receive total dividends of $4 (i.e., $2 for each share), and sell the shares for $54.50 each. What is the time-weighted return on your investment
Business
1 answer:
kkurt [141]3 years ago
8 0

Answer:

17.76%

Explanation:

The computation of the time-weighted return on your investment is given below

But before that we have to do the following calculations

Year 1 = ($46.50 - $42.50) + 2 ÷ ($42.50) × 100 = 14.12%

Year 2 = ($54.50 - $46.50) + 2 ÷ ($46.50) × 100 = 21.51%

Now the time weighted return is

(1 + t)^2 = (1 + 14.12%) × (1 + 21.51%)

= 1.1412 × 1.2151

= √1.3867 - 1

= 17.76%

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Sunny Day Manufacturing Company has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2
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Alpha Moose Transporters's retained earnings breakpoint is B. $1,655,556

Explanation:

Addition to retained earnings = $745,000

Weight of equity = 45%

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= $1,655,556.

Retained earnings breakeven is $1,655,556.

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You are a jeweler who wants to make sure you have the maximum number of diamonds for sale. You notice that the number of diamond
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sensitivity

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7 0
3 years ago
Myers Company acquired a 60% interest in Gannon Corporation on December 31, 2020 for $1,775,000. During 2021, Gannon had net inc
miskamm [114]

Answer:

The answer is $2,225,000

Explanation:

Cost of acquisition is $1,775,000

Meyer company's share of net income in Gannon corporation:

60% of $1,000,000

0.6 x $1,000,000

= $600,000

Meyer company's share from cash dividend in Gannon corporation

60% of $250,000

0.6 x $250,000

= $150,000

The balance in the equity investment account at December 31, 2021 should be:

$1,775,000 + $600,000 – $150,000

= $2,225,000

6 0
3 years ago
Requirement 1. Compute the profit margin ratio for Achieve​'s Companies for 2018. Begin by selecting the formula to calculate Ac
tamaranim1 [39]

Given Information:

                         Achieve​'s Companies Income statement

                           Years ended May 31 , 2018 and 2017    

                                                                         2018                2017

Net sales revenue                                          51,200            50,700

Costs of goods sold                                       20,800           28,600

Interest expense                                              400                  280

All other expenses                                          6,200              7800

Net income                                                      23,800            14,020

Explanation:

(1) Profit Margin Ratio for 2018

Profit Margin Ratio for 2018 = [Net Income / Net Sales Revenue] x 100

= [$23,800 / $51,200] x 100

= 46.5%

(2) Rate of Return on total assets for 2018

Rate of Return on total assets for 2018 = [Net Income / Average Total Assets] x 100

= [$23,800 / {($86,700 + $57,700)/2}] x 100

= [$23,800 / $72,200] x 100

= 33.0%

(3) Asset Turnover Ratio for 2018

Asset Turnover Ratio for 2018 = Net Sales Revenue / Average Total Assets

= $51,200 / $72,200

= 0.71 Times

(4) Rate of return for Common Stockholders Equity for 2018

Rate of return for Common Stockholders Equity for 2018 = [Net Income / Average Equity] x 100

= [$23,800 / {($45,200 + $32,900)/2}] x 100

= [$23,800 / $39,050] x 100

= 60.9%

3 0
3 years ago
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