Answer:
a. $1.80
b. 18.33 times
Explanation:
The computation of the earning per share is shown below:
a. Earning per share = (Net income after tax) ÷ (Number of shares)
= ($9,216,000) ÷ (5,120,000 shares)
= $1.80
b. And, the Price-earnings ratio = (Market price per share) ÷ (Earning per share)
= $33 ÷ $1.80
= 18.33 times
Answer:
Callie's Gross Profit is $562000
Explanation:
Gross profit is the profit earned by a business after deducting the costs associated with producing or selling its goods (for manufacturing and trading businesses) or the costs associated with providing the services (for service businesses) from the net revenue.
It is the profit from the trading section of the business before deducting the operating and financing expenses of the business and before adding any other income.
The gross profit is simply calculated as follows,
Gross Profit = Net Revenue - Cost of Goods Sold
Callie's gross profit = 940000 - 378000
Callie's Gross Profit = 562000
Answer:
D) Homogenization of time and routinization
Explanation:
E-commerce software has changed a highly customized activity (determining where and how an individual could fly to) and reduced it to a simple routine. Customers can check their flight status whenever they want. They do not have to wait to contact a travel agent or even wait for a travel agency to open. Therefore time has been homogenized and transactions routinized.
Answer:
Using the current capital structure
Ke = Rf + β(Risk premium)
Ke = 5 + 1.60(6)
Ke = 5 + 9.60
Ke = 14.60
Weighted cost of equity
= 14.60(20/100)
= 2.92%
Using the new debt-equity ratio
Ke = 5 + 1.60(6)
Ke = 5 + 9.6
Ke = 14.60%
Weighted cost of equity
Ke = 14.60(60/100)
Ke = 8.76%
Difference in cost of equity
= 2.92% - 8.76%
= -5.8%
Explanation:
There is need to calculate the cost of equity based on capital asset pricing model where Rf represents risk-free rate, Rp denotes risk-premium and β refers to beta. Then, we will calculate the weighted cost of equity by multiplying cost of equity by the proportion of equity in the capital structure. We will also calculate the new weighted cost of equity by multiplying the cost of equity the new proportion of equity in the capital structure. Finally, we will deduct the new weighted cost of equity from the old weighted cost of equity.
