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Readme [11.4K]
3 years ago
12

Brushy Mountain Mining Company's ore reserves are being depleted, so its sales are falling. Also, its pit is getting deeper each

year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 6% per year. What is the value of Brushy Mountain's stock (in dollars) if the company is expected to pay $4.40/share in dividend at t
Business
1 answer:
hammer [34]3 years ago
6 0

The question is incomplete. The complete Question is,

Brushy Mountain Mining Company's coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 4% per year. If D0 = $2 and rs = 17%, what is the estimated value of Brushy Mountain's stock?

Answer:

P0 = $9.1428 rounded off to 9.14

This answer is for the question above. Change the values and use the same formula if the values differ

Explanation:

The constant growth model of dividend discount model (DDM) can be used to calculate the price of the stock today. DDM calculates the price of a stock based on the present value of the expected future dividends from the stock. The formula for price today under constant growth DDM is,

P0 = D0 * (1+g) / (r - g)

Where,

D0 * (1+g) is the dividend expected in Year 1 or next year

g is the constant growth rate in dividends

r is the discount rate or required rate of return

P0 = 2 * (1-0.04)  /  (0.17 + 0.04)

P0 = $9.1428 rounded off to 9.14

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Bawl purchased ABC bonds on 1/1/21. Data regarding these available-for-sale securities follow: Cost MV December 31, 2021 $100,00
GrogVix [38]

Answer:

Bawl with ABC bonds

The unrealized Gain/Loss reported in OCI of the 2023 Comprehensive Income statement is:

A Loss of $5,000

Explanation:

a) Data and Calculations:

                                           Cost                MV      Unrealized Profit or (Loss)

December 31, 2021        $100,000     $ 91,000        $9,000 (Loss)

December 31, 2022         100,000        111,000        20,000

December 31, 2023         100,000      106,000          5,000 (Loss)

   Available-for-sale Investment

               Debit       Credit

Dec 31   100,000

Loss                         9,000

Dec 31     91,000    

Profit      20,000

Dec 31    111,000

Loss                        5,000

Dec 31  106,000

The Available-for-sale Investment will show a loss of $5,000 in the Other Comprehensive Income of the 2023 Comprehensive Income Statement based on the yearly adjustments to the account with losses and profits.

6 0
3 years ago
Studies on a machine that molds plastic water pipe indicate that when it is injecting 1-inch diameter pipe, the process standard
Otrada [13]

Answer:

b. 0.67

Explanation:

UCL = 1 + 0.10

        = 1.10 inch

LCL = 1 - 0.10

       = 0.9 inch

standard deviation = 0.005 inch

mean = 1 inch

Cpk

= min[(UCL - mean)/(3*standard deviation) , (mean - LCL)/(3*standard deviation))]

= min[(1.10 - 1)/(3*0.05) , (1 - 0.9)/(3*0.05))]

= min[0.67 , 0.67]

= 0.67

Therefore, Theprocess capability index (Cpk) if the long-run process mean is 1 inch is 0.67

3 0
4 years ago
Kenner company produces two products: SR200 and TX500. Budged sales for four months are as follows;
NARA [144]

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Budgeted production TX500

May 20,000

June 32,000

July 39,000

August 46,000

TX500 should have 40% of next months sales in ending Inventory. On May 1, there were 9,000 units of TX500.

Production for June:

Sales= 32,000 units

Ending inventory= (39,000*0.40)= 15,600

Beginning inventory= (32,000*0.4)= 12,800 (-)

Total= 34,800 units

8 0
3 years ago
The management of Firebolt Industries Inc. manufactures gasolineand diesel engines through two production departments, Fabricati
GalinKa [24]

Solution:

Single factory overhead amount: the amount at which plant overheads or processing overheads are assigned to goods is referred to as single plant overhead rate.

Formula to measure a single plant-wide overhead rate:

Single plant-wide overhead rate :

\frac{Total budgeted factory overhead}{ Total budgeted plant-wide allocation base}  

Different development team overhead rate: this distribution system describes the various divisions engaged in the manufacturing cycle. Factory overheads are assigned to goods on the basis of the overhead cost for each of the manufacturing units.

Formula for calculating various output department overhead:

Multiple production department overhead rate:

\frac{ Budgeted department factory overhead}{ Budgeted department factory overhead}

For calculate: single plant-wide overhead rate use direct working hours (DLH) as the allocation basis, and measure factory overhead.

Using DLH as the allocation basis to measure a single plant-wide overhead limit.

Single plant-wide overhead rate :  \frac{Total budgeted factory overhead}{ Total budgeted plant-wide allocation base}

                                                     = \frac{80,000}{10,000 DLH}

For calculate: single plant-wide overhead rate use direct working hours (DLH) as the allocation basis, and measure factory overhead.

Using DLH as the allocation basis to measure a single plant-wide overhead limit.

4 0
3 years ago
Round 784.967 to the nearest whole number
ella [17]
784.967 rounded to the nearest whole number is 785
5 0
3 years ago
Read 2 more answers
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