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yanalaym [24]
2 years ago
10

Northrup-Grumman Corporation is expected to pay $1.25 per share for its next dividend. If shares are trading at $27.22 and analy

sts expect common dividends to grow at 2.4%, what is the return on common shares?
Business
1 answer:
hammer [34]2 years ago
3 0

Answer:

the  return on common shares is 6.99%

Explanation:

The computation of the return on common shares is shown below:

= Dividend ÷ Stock price + growth rate

= $1.25 ÷ $27.22 + 2.4%

= 6.99%

hence, the  return on common shares is 6.99%

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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For a levered firm, flotation costs should
KengaRu [80]

Answer:

The answer is option B. For a levered firm, flotation costs should <u>be spread over the life of a project, thereby reducing the cash flows for each year of the project.</u>

Explanation:

When a company’s securities are listed on a public exchange, there is a general saying that securities are floated on the exchange. That is how the name flotation costs came about.

Flotation is actually the costs  incurred by a company in issuing its securities to public.  it is also called issuance costs.

Examples of Flotation costs include charges paid to the investment bankers, lawyers, accountants, registration fees of the securities regulator and the exchange on which the issue is to be listed.

Flotation cost would vary based on several factors, such as company’s size, issue size, issue type (debt vs equity),

In summary, Flotation costs are the cost a company incurs to issue new stock making new equity cost more than existing ones.

Business analysts argue that flotation costs are a one-time expense that should be adjusted out of future cash flows in order to not overstate the cost of capital forever.

It is based on this premise that i chose option B, which states that flotation costs be spread over the life of a project thereby reducing the cash flows for each year of the project at levered firms.

5 0
2 years ago
Communication response time must be faster than in the past to succeed in modern workplace t or f?
goblinko [34]

Answer:

T.

Communication response time must be faster than in the past to succeed in the modern workplace. TRUE.

8 0
3 years ago
Read 2 more answers
The Brainchild is a store that specializes in educational toys for children. In order to increase the probability of customers v
Viefleur [7K]

Options: decreasing an importance weight. increasing a performance belief. decreasing the performance belief for a competitive retailer. adding new benefits. focusing on all benefits.

Answer: ADDING NEW BENEFITS.

Explanation:Adding new benefits or improving existing benefits are ways used by Store or business organisations to attract new customers or to retain existing ones or improve its number of loyal customers.

Benefits are free services or gifts given, Brainchild has increased the benefits of buying from its store by offering discounts, gift wrapping, and free shipping,all these will attract more customers to its store and hence increase loyal customers and number of customers.

6 0
3 years ago
A firm incurs $35,000,000 of actual OH costs. It has a PDOH rate of $450 per machine hour and 100,000 machine hours were actuall
ella [17]

Answer:

c.  Debit: Overhead Control $10,000,000  

Credit: Cost of Goods Sold $10,000,000

Explanation:

The journal entry to close the overhead account is presented below:

Overhead Control A/c Dr $10,000,000

       To Cost of Goods Sold A/c  $10,000,000

(Being the overhead account is closed)

The computation is shown below:

= Applied overhead - actual overhead

where,

Applied overhead equal to

= $450 × 100,000 machine hours

= $45,000,000

And, the actual overhead is $35,000,000

So, the amount would be

= $45,000,000 - $35,000,000

= $10,000,000

Since the applied overhead is greater than the actual overhead, so we debited the overhead control account and credited the cost of goods sold account

5 0
3 years ago
The common stock of Buffalo Inc. is currently selling at $113 per share. The directors wish to reduce the share price and increa
ruslelena [56]

Answer:

Buffalo Inc.

a. Journal Entry:

No journal entry required except a memorandum to record the split.  

b. Journal Entry:

Debit Stock Dividend (Retained Earnings) $84 million

Credit Stock Dividend Distributable $84 million

To record the declaration of a 100% stock dividend.

When issued:

Debit Stock Dividend Distributable $84 million

Credit Common Stock $84 million

To record the issuance of stock dividends.

2. Both methods increase the outstanding number of shares by 100%.  However, with a stock split of 2-for-1, there is no journal entry except a memorandum record to state the split.

Secondly, with a stock split or 2-for-1, the market price is also halved.  This does not happen with a stock dividend.  The market forces will determine and correct the market price to an acceptable level.  A stock dividend requires some accounting entries to be made.

Explanation:

a) Data and Calculations:

Current market price of common stock per share = $113

Par value per share = $10

Book value per share = $68

Shares issued and outstanding = 8.40 million

a. The board votes a 2-for-l stock split:

Shares outstanding = 16.80 million shares

Market price = $56.50

Journal Entry:

No journal entry required except a memorandum to record the split.  The value of common stock remains the same.

b. The board votes a 100% stock dividend:

Shares outstanding will increase to 16.80 million shares

Market price = $113 and level off based on demand and supply.

Journal Entry:

Stock Dividend (Retained Earnings) $84 million

Common Stock $84 million

5 0
2 years ago
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