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kirill115 [55]
3 years ago
9

1. You are evaluating the purchase of HypeToys, Inc. common stock that just paid an annual dividend of $1.80. You expect the div

idend to grow at a rate of 12% per year, indefinitely. You estimate that a required rate of return 17.5% will be adequate compensation for this investment. Assuming that your analysis is correct, and the company pays dividends once a year, what is the most that you’re willing to pay for the common stock if you were to purchase it today? Round to the nearest $.01.
Business
1 answer:
Arte-miy333 [17]3 years ago
5 0

Answer:

$36.65

Explanation:

D1 = D*(1+g)

D1 = 1.8*(1+0.12)

D1 = 1.8(1.12)

D1 = $2.016

Price of stock P = D1 / (re - g)

Price of stock P = $2.016 / (0.175 - 0.12)

Price of stock P = $2.016 / 0.055

Price of stock P = $36.654545

Price of stock P = $36.65

So, $36.65 is the most that i will be willing to pay for the common stock if i am to purchase it today.

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3 years ago
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If revenues are recognized only when a customer pays, what method of accounting is being used?Recognition basisAccrual-basisMatc
Dvinal [7]

Answer:

The correct answer here is Cash basis.

Explanation:

One of the methods of recording accounting transactions for income and expenses is cash basis accounting , where the transactions are only recorded when income is received in cash or expenses are paid in cash. This accounting method is not accepted by GAAP (Generally accepted accounting principle ) and IFRS ( International financial reporting standards ) because this method violates the income ( revenue ) and expense recognition principle.

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3 years ago
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Answer: See explanation

Explanation:

Sales = 747300

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Less: Depreciation = 89300

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Net income = EBIT - Taxes = 75400 - 16588 = 58812

a. Calculate the OCF.

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= Net income + Depreciation

= 58812 + 89300

= 148,112

b. What is the depreciation tax shield?

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5 0
3 years ago
Clarifying the issues of a problem is the _____ step in the problem solving process.
solmaris [256]

Answer:

hii there

The correct answer is option ( A )

8 Step Problem Solving Process

Step 1: Define the Problem. What is the problem?

Step 2: Clarify the Problem.

Step 3: Define the Goals.

Step 4: Identify Root Cause of the Problem.

Step 5: Develop Action Plan.

Step 6: Execute Action Plan.

Step 7: Evaluate the Results.

Step 8: Continuously Improve

Explanation:

Hope it helps

have a nice day

8 0
3 years ago
An incomplete cost of goods manufactured schedule is presented below. Complete the cost of goods manufactured schedule for Vaugh
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= 188,420 - 159,120 + 22,610

= $‭51,910‬

Total cost of work in process = Cost of goods manufactured + Work in process (12/31)

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Total Manufacturing costs = Total cost of work in process - Work in process (1/1)

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Direct labor = Total Manufacturing costs - Total overhead - Direct materials used

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3 years ago
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