Answer:
Investors’ outlook for the firm has improved.
Explanation:
Computation of Market price.
MPS = PE ratio × EPS
⇒ MPS (Previous) = $1.20 × 15
⇒ MPS (Previous) = $18
⇒ MPS (Current) = $1.20 × 18
⇒ MPS (Current) = $21.60
So, we say that the market price has increased.
Investors’ outlook for the firm has improved.
Answer:
Using the dividend discount formula we can find what the price of a stock should be using its growth rate, required return and dividend amount.
The formula is D*(1+G)/R-G, where d= dividend, G= Growth rate and R = required return. In this case we know the dividend is 2.50, the growth rate is 4% and the required return is 15% so in order to find the value or price of the stock we will input these values in the formula.
2.5*(1+0.04)/0.15-0.04=23.63
According to the dividend discount method the price of the stock should be $23.63.
Explanation:
Answer:
$30,000
Explanation:
The computation of the royalty revenue reported is shown below:
= Patent-related sales for the year × given percentage
= $300,000 × 10%
= $30,000
The revenue is recognized when it is earned or realized so only $30,000 is to be reported as the royalty revenue
The remaining amount i.e $20,000 would be treated as an unearned royalty revenue
Answer:
$49.81
Explanation:
The stock price of the one share of the preferred stock in the given question shall be determined through the dividend valuation formula which is given as follow:
Price of share=Dividend per share/Rate of return
In the given question:
Dividend per share=$5.20
Rate of return=10.44%
Price of share=5.20/10.44%=$49.81
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