Answer:
d. 16% - buy
Explanation:
R = (D1 / P0) + g
Where, R=Expected Return, P0 = Current Market Price = $40, D1=Expected Dividend=$, g = Expected Growth Rate = 11% = 0.11
Expected Return = R = ($2/$40) + 11%
R = 0.05 + 0.11
R = 0.16
R = 16%
Expected Return is higher than the required return of 12%. Hence, it should be bought (it is expected to give higher return than required)
Answer:
Answer ; Pension Expenses : $7.5million
Explanation:
Calculation of amount that Harvey Hotels report as pension expense in its income statement for the year -
Particulars Explanation Amount
Service cost Given in the question $6.2 million
Add: Interest cost Given in the question $1.4 million
Less: Expected return on plan assets Given in the question $1.2 million
Add: Amortization of prior service cost Given in the question $1.1 million
Pension Expense ($6.2+$1.4-$1.2+$1.1)million $7.5 million
Hence, option - (B) is Correct.
Answer:
the weekly grocery bill in 4 years is $486.2025
Explanation:
The computation of the weekly grocery bill in four years is shown below:
= Estimated amount × (1 + rate of interest)^number of years
= $400 × (1 + 0.05)^4
= $400 × 1.21550625
= $486.2025
hence, the weekly grocery bill in 4 years is $486.2025
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Answer:
Calculate the dirty price.
Here, coupon interest is compounded semiannually. Hence, divide coupon rate by 2.
Dirty Price = Bond Clean Price + Accrued Interest
Dirty Price = Bond Clean Price +(Face Value X Coupon Rate/2 X Day Count/ Total Days
Dirty price = 1026 + (1000 x 6.6%/2 x 74/183)
Dirty price = $1,039.34
Answer:
<u>December 31, 2018</u>
Debit : Dividend $40,000
Credit : Shareholders for dividends $40,000
Explanation:
When dividends are declared, we Debit an Equity Element - Dividend and Credit the Liability - Shareholders for dividends.
Calculation of this dividend is made on the stockholders in existence at the on a stated date (January 15 in this case) and at par value ($2) as follows :
Dividend = 100,000 x $2.00 x $0.20 = $40,000
