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Feliz [49]
2 years ago
9

17. Wislow Brothers common stock sells for $30 a share and pays an annual dividend that increases by 4 percent annually forever.

The market rate of return on this stock is 10 percent. What is the closest value to the amount of the dividend in two years
Business
1 answer:
Neko [114]2 years ago
6 0

Answer:

$1.95

Explanation:

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid

r = cost of equity

g = growth rate

30 = d / 0.1 - 0.04

d = 30 x 0.06 = 1.8

growth in 2 years = 1.8 x (1.04^2) = $1.95

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chubhunter [2.5K]

Answer: debit to Product Warranty Expense for $750

Explanation: 5% of $15000 =

5 ÷ 100 × $15000 is $750.

This is an expense and so will be a debit.

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gregori [183]

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3 years ago
Read 2 more answers
How are bonds payable usually classified on the balance sheet?
earnstyle [38]

Bonds payable that are <u>long-term obligations</u> are typically recorded on the balance sheet.

<h3><u>How do long-term liabilities work?</u></h3>

Long-term liabilities are debts owed by a business that won't be paid off for at least a year. To give a clearer picture of a company's present liquidity and its capacity to meet its obligations as they come due, the current part of long-term debt is broken out separately from other debt.

Long-term liabilities are also referred to as noncurrent liabilities or long-term debt. The balance sheet's part that may include debentures, loans, deferred tax liabilities, and pension obligations is where long-term liabilities are stated following more immediate liabilities.

Liabilities that are greater than one year in duration or that are not due within the next 12 months are referred to as long-term liabilities. The time it takes a business to convert its inventory into cash is known as its operational cycle.

Learn more about long-term liabilities  with the help of the given link:

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7 0
1 year ago
Discuss decision making under conditions of uncertainty, specifically using expected monetary value
IceJOKER [234]

Answer with Explanation:

The decision making under the conditions of uncertainty:

Uncertainty is an unquantifiable outcome of a decision that can not be mathematically modeled whereas risk is a quantifiable outcome of a decision that can be mathematically modeled.

The expected value method helps in decision making related to uncertainty are making prudent estimates of cash flow by using expected value.

Expected value considers every outcome under uncertainty and computes all of the expected value for each outcome. The outcome that gives highest expected value is said to be best case and likewise the outcome that gives lowest expected value is said to be worst case.

Suppose that two projects gives the same expected value, then the decision will be based on the degree of uncertainty which means the project that has lowest uncertainty of returns will be our choice.

The deviation of the expected value from required return on a project can be measured as a Degree of uncertainty that helps in understanding to what extent the return will be not as per the expectation. The Precise Measurement of uncertainty can be calculated by inclusion of standard deviation to estimate expected value of the decision taken.

The expected money value is the monetary value that a particular decision will generate. In expected monetary value the decision is based on the weighted average of best case and worst case. The value derived is average thus the standard deviation would be very low which means that the calculation was precise. Decision trees are used in precise measurement of cash flow related to each expected outcome and deriving a weighted average value.

5 0
3 years ago
Rodney Blevins is a vacuum cleaner salesman. He earns a 22 percent commission on every vacuum cleaner he sells. In the month of
lakkis [162]
The commission for the month of December is $2,767.60

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(1,258*10)= $12,580 we apply the 22% to that result and we obtain $2,767.60
3 0
3 years ago
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