Answer:
33.94%
Explanation:
The computation of stock's expected price 5 years is shown below:-
Stock price = $26
Required return = 12%
Growth rate = 7%
Current dividend per share = Stock price × (Required return - Growth rate) ÷ (1 + Growth rate)
= $26 × (12% - 7%) ÷ (1 + 7%)
= $26 × 5% ÷ 1.07
= $1.21
Stock price in 5 years = Expected dividend ÷ (required return - Growth rate)
Expected dividend = $1.21 × (1 + 7%)^5
= $1.21 × 1.402551731
= $1.697
Stock price in 5 years = $1.697 ÷ (12% - 7%)
= $1.697 ÷ 5%
= 33.94%
Answer:
The variable overhead rate variance for the month is $2,548 favorable
Explanation:
In this question, we use the formula of the variable overhead rate variance which is shown below:
= Actual level of activity × (Standard rate - Actual rate )
= 9,100 × ($7.60 - $7.32)
= 9,100 × 0.28
= $2,548 favorable
The actual rate is not given in the question, so we have to compute by using the formula which is given below:
= Actual total variable manufacturing overhead ÷ Actual level of activity
= $66,600 ÷ 9,100
= $7.32
Hence, the variable overhead rate variance for the month is $2,548 favorable
Answer: (d.)The bakery faces a flat demand curve.
Explanation:
The bakery faces a flat demand curve because a firm in a perfectly competitive market is a price taker and the demand curve for a firm is equal to the price the supply curve is a part of Marginal cost above Average variable cost , so the supply curve is upward sloping
. The bakery is in the perfectly competitive market so it can earn positive, negative or zero economic profit in the short run and zero economic profit in the long run.
Answer:
Explanation:
Last dividend = $1.85 (D0)
growth rate = 4% (g)
Current year dividend (D1) = 1.85*(1+0.04) = $1.924
r = 12%
Current price = D1/(r-g) = 1.924/(0.12-0.04) = 24.05
Price in 3 years = D4/(r-g) = D0*(1+g)^4/(r-g) = 1.85*1.04^4/0.08 = $27.0529792
Price in 14 years = D14/(r-g) = D0*(1+g)^15/(r-g) = 1.85*1.04^15/0.08 = $41.647
Answer:
Coupon rate is 6.4%
Explanation:
The coupon payment on a bond can be computed from a formula of current price of a bond
current price of a bond=coupon amount/yield to maturity
coupon amount=current price *yield to maturity
current price is $1039
yield to maturity is 6.2%
coupon rate =$1039*6.2%
=$64.42
Coupon rate=coupon amount/par value of bond
coupon amount $64.42
par value of bond=$1000
coupon rate =$64.42/$1000
=6.4%
