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elena-s [515]
3 years ago
10

FLASH Delivery has EPS of $6.00 per share and has a payout ratio of 40%. Its dividend is expected to grow at a rate of 5.25%. If

FLASH stock is trading at $22.86, then the shareholder's required return is closest to:_______
a. 14.2%
b. 15.7%
c. 16.3%
d. 16.9%
Business
1 answer:
beks73 [17]3 years ago
6 0

Answer:

The answer is "Option c"

Explanation:

The Dividend payout ratio is 40% so that EPS* is the dividend payout ratio of the company:

= 6 \times 40 \% \\\\= \$ \ 2.40

Inventory market value:

= Dividend \times \frac{(1+g)}{(r-g)}

Where r = return rate is needed

g= growth = 5.25\% = \frac{5.25}{100} = 0.0525

\to 22.86 = \frac{(2.4 \times (1+g))}{ r-0.0525}\\\\\to 22.86 = \frac{(2.4 \times (1+0.0525))}{r-0.0525}\\\\\to (22.86 \times r)-(22.86 \times 0.0525)=2.526\\\\\to (22.86  \times r)-1.20015=2.526\\\\\to 22.86r=3.72615\\\\\to r=0.1630\\\\\to r=16.30 \%

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The term ____________________ refers to a market exchange that affects a third party who is outside or external to the exchange.
Flauer [41]

Answer: B. spillover

Explanation:

A Spillover is used to refer to the effects of an Externality which is what happens when a market exchange leads to effects on a third party that was not party to a transaction between the contracting parties.

The activities that result from the transaction spillover to the third party and can be either negative or positive. A negative spillover would be countries in Africa getting harsher global warming effects due to companies in china polluting the atmosphere.

5 0
3 years ago
Dora earns 50,000 a year at her johs. when she was given a raise of 5,000 her spending increased from 50,000 to 54,000 calvulate
weqwewe [10]
Given:
ΔY = $5,000, the change in income
ΔS = 50,000 - 54,000 = - 4,000, the change in savings.

By definition,
MPS (Marginal Propensity to Spend) is
MPS = ΔS/ΔY = -4000/5000 = -0.8

The relation between MPS and MPC (Marginal Propensity to Consume) is
MPS + MPC = 1.
Therefore
MPC - 0.8 = 1
MPC = 1.8

Answer:
MPS = 0.8
MPC = 1.8


5 0
2 years ago
Read 2 more answers
Identify and explain two characteristics of the packaging of the chocolate bars​
zubka84 [21]
Chocolate products are protected throughout the distribution process. Flexible packaging keeps goods fresher for longer, as packaging can include foil layers that ensure that products are preserved. Flexible chocolate packaging provides valuable nutritional information that assist consumers in correct product selection.
hope it helps you
thank you
5 0
2 years ago
Alpaca Corporation had revenues of $290,000 in its first year of operations. The company has not collected on $18,600 of its sal
Kitty [74]

Answer:

$118,860

Explanation:

Gross Margin:

= Revenue - Cost of Goods Sold

= $290,000 - $100,000

= $190,000

Profit before tax:

= Gross Margin - Salaries - Insurance payment - Interest

= $190,000 - $12,000 - $3,600 - $4,600

= $169,800

Insurance payment: Only half of 2-year payment of 7,200 is relevant for this year.

Net Income:

= Profit before tax - Tax at 30%

= $169,800 - (30% × $169,800)

= $169,800 - $50,940

= $118,860

8 0
2 years ago
Problem 2-15 (Algorithmic) Life Insurance (LO 2.8) Sharon transfers to Russ a life insurance policy with a cash surrender value
skelet666 [1.2K]

Answer:

$38,440

Explanation:

Calculation to determine How much of the proceeds, if any, is taxable to Russ

Face value of policy $74,400

Less: Cash Surrender value ($24,800)

Less: Premium paid ($11,160)

Taxable Proceeds $38,440

Therefore the taxable Proceeds are $38,440.

6 0
2 years ago
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