Answer: Share price after announcement is $41.67.
The Expansion is not a good investment.
Explanation:
To solve this we would need to first calculate the cost of equity. Given the Initial stock price as well as the dividend and growth rate, we are able to calculate the cost of equity using the Gordon Growth Formula which is,
Sp = D1/ (r - g)
Where,
Sp is stock price
D1 is the next dividend
r is cost of equity
g is growth rate.
Inserting the figures we have,
50 = 4 / ( r - 3%)
50 ( r - 3%) = 4
r = 4/50 + 3%
r = 11%
Given that we now know r, we can calculate the new stock price using the same formula,
Sp = D1/ ( r - g)
Sp = 2.5 ( 11% - 5%)
Sp = $41.67
The stock price after the announcement became $41.67.
The Expansion is NOT a good investment as it leads to a reduction in Stock Price.
. The amount of the purchase cost that should be allocated to the land and building are as follows:
Land = $233,750
Building = $701,250
The company would not recognize a gain on the purchase but uses the appraised values to determine the costs to be allocated to the two assets.
c. Statements model:
Balance Sheet Income Statement Statement of
Cash Flows
Assets = Liabilities + Equity Revenue - Expenses = Net Income
Cash Land Building
($935,000) $233,750 $701,250 $0 - $0 = $0 ($935,000) IA
d. General Journal
Account Titles Debit Credit
Land $233,750
Building $701,250
Cash $935,000
<h3>Is a debit money in or out?</h3>
When your bank account is debited, money is taken out of the account.
The opposite of a debit is a credit, in which case money is added to your account.
Learn more about debit and credit here:
<h3>
brainly.com/question/14283668</h3><h3 /><h3>#SPJ4</h3>
Answer:
$10.98
Explanation:
Dividend per year;
D1 to D2 = 0
D3 = 1.25
D4 = 1.25 (1.21) = 1.5125
D5 = 1.5125 (1.21) = 1.8301
D6 = 1.8301 (1.08) =1.9765
Find Present values of each dividend at 18% required return;
PV( D1 to D2) = 0
PV( D3) = 1.25/1.18³ = 0.7608
PV( D4) = 1.5125 / (1.18^4) = 0.7801
PV( D5) = 1.8301 / (1.18^5) = 0.8000
PV( D6 onwards) 
PV( D6 onwards) = 8.6393
Next, sum up the PVs;
= 0 + 0.7608 + 0.7801 + 0.8000 + 8.6393
= 10.98
Therefore, this stock is valued at $10.98
Answer:
$240.76
Explanation:
The formula to determine the annual deposit is :
p = FV / annuity factor
Annuity factor = {[(1+r)^n] - 1} / r
FV = Future value
P = Present value
R = interest rate
N = number of years
Annuity factor = (1.07^11 - 1) / 0.07 = 15.783599
p = $3800 / 15.783599 = $240.76
Answer:
The correct answer is A that is smoothing out the random fluctuations.
Explanation:
The higher values of K states the greater number of the values which need to be consider for forecasting.
When consider or taking the larger or the higher value of the irregular fluctuation which could be decreased or reduced.
And as a consequence, the large value of K will be used for smoothing of the random fluctuations.
Therefore, the right answer is smoothing of the random fluctuations.
