How can interest rate fluctuations impact a nation's economy?

Walter Utilities is a dividend-paying company and is expected to pay an annual dividend of $0.65 at the end of the year. Its div

Anastaziya [24]

Answer:

14.90%

Explanation:

We know,

Current stock price, $P_{0}$ = $\frac{D_{1}}{r_{s} - g}$

Given,

Current stock price, $P_{0}$ = $12.00

growth rate, g = 9.50% = 0.095

Expected annual dividend, $D_{1}$ = $0.65

We have to determine the expected rate of return ( $r_{s}$ ).

Putting the values into the above formula, we can get,

Current stock price, $P_{0}$ = $\frac{D_{1}}{r_{s} - g}$

or, $12.00 = $0.65 ÷ ( $r_{s}$ - 0.095)

or, $12.00 × ( $r_{s}$ - 0.095) = $0.65

or, $r_{s}$ - 0.095 = $0.65 ÷ $12.00

or, $r_{s}$ - 0.095 = 0.0542

or, $r_{s}$ = 0.054 + 0.095

Therefore, $r_{s}$ = 0.149

The expected rate of return = 0.149 or 14.90%

7 0

3 years ago

hornton Computer Services, Inc. has been in business for six months. The following are basic operating data for that period: Mo

nignag [31]

Answer:

The total monthly fixed cost and the variable cost per hour is $1,540 and $23

The average contribution margin per hour is $27

Explanation:

The computation of the fixed cost and the variable cost per hour by using high low method is shown below:

Variable cost per hour = (High Operating cost - low operating cost) ÷ (High service hours - low service hours)

= ($11,200 - $4,300) ÷ (420 hours - 120 hours)

= $6,900 ÷ 300 hours

= $23

Now the fixed cost equal to

= High operating cost - (High service hours × Variable cost per hour)

= $11,200 - (420 hours × $23)

= $11,200 - $9,660

= $1,540

For computing the contribution margin per hour, first we have to compute the revenue per hour which is shown below:

= Revenue ÷ service hours

= $6,000 ÷ 120 hours

= $50

We know that,

The contribution per hour = Revenue per hour - variable cost per hour

= $50 - $23

= $27

8 0

3 years ago

A market for existing financial securities that are currently traded among investors is called the ________ market. super fundam

Nadya [2.5K]

A market for existing financial securities that are currently traded among investors is called the Secondary market.

A secondary market is a market for the purchase and sale of existing securities or other assets. They differ from primary markets, where the assets were created. Generally, most investors will only trade on secondary markets.

Transactions in the secondary market are undertaken with other investors rather than the security issuer. The procedure is comparable to buying products from the classifieds or a used car from a dealership rather than the manufacturer.

Stocks and bonds purchased in a retirement plan or through a brokerage account, for example, are traded on secondary markets.

Assume you have two portfolios: one through an employee stock ownership plan and the other through a discount brokerage. The main market transaction occurs when you purchase stock directly from the corporation, like in the first plan. It is a secondary market transaction when you buy in a discount brokerage account through stock exchanges.

Learn more about Secondary Markets here:

brainly.com/question/17168396

#SPJ4

8 0

2 years ago

A pretzel-stand owner in Chicago hires workers to make hot pretzels and sell them to customers. If the firm is competitive in bo

lisabon 2012 [21]

Answer:

D. no control over either the price of pretzels or the wage it pays to its workers.

Explanation:

A competitive market is characterised by many firms that are price takers. Firms that are price takers have no influence over the price they charge for their products; prices are set by the forces of demand and supply.

If the market for pretzels are competitive, the firm cannot set the price for pretzels. If the pretzel stand owner increases the price for pretzels, consumers patronize other pretzel stand owners. There would be no incentive for the pretzel owner to reduce its cost because the pretzel stand owner would be reducing its revenue and reducing its profit

If the market for pretzel makers is competitive, firms have no influence on wages that can be paid to workers.Wages are determined by the forces of demand and supply. If wages are cut, workers move to other firms. There would be no incentive to increase wages because it would increase cost and reduce profit.

4 0

3 years ago

*Grouper, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas le

umka2103 [35]

Answer:

1) Using incremental analysis, accept this offer because it shall result in incremental Net Income of $13,000.

2) The offer should not be accepted because it shall result in incremental Net Loss of $17,000.

Explanation:

Assume that $405,000 of the fixed overhead cots can be avoided

Make Buy Net Income Income

Increase Increase

(Decrease) (Decrease)

Direct materials $980,000 $0 $980,000 $0

Direct labor $764,400 $0 $764,400 $0

Variable overhead $137,200 $0 $137,200 $0

Fixed overhead $600,000 $195,000 $405,000 $405,000

Purchase price $0 $2,273,600 ($2,273,600) ($392,000)

Total annual cost $2,481,600 $2,468,600 $13,000 $13,000

Using incremental analysis, accept this offer because it shall result in incremental Net Income of $13,000.

Make Buy Net Income Income

Increase Increase

(Decrease) (Decrease)

Direct materials $980,000 $0 $980,000 $0

Direct labor $764,400 $0 $764,400 $0

Variable overhead $137,200 $0 $137,200 $0

Fixed overhead $600,000 $600,000 $0 $0

Opportunity cost $375,000 $0 $375,000 $375,000

Purchase price $0 $2,273,600 ($2,273,600) ($392,000)

Total annual cost $2,856,600 $2,873,600 ($17,000) ($17,000)

The offer should not be accepted because it shall result in incremental Net Loss of $17,000.

3 0

3 years ago