1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
horrorfan [7]
2 years ago
7

Blue Dog Manufacturing Corp. just reported a net income of $7,000,000, and its current stock price is $23.00 per share. Blue Dog

is forecasting an increase of 25% for its net income next year, but it also expects it will have to issue 1,900,000 new shares of stock (raising its shares outstanding from 5,500,000 shares to 7,400,000 shares).
Required:
If Blue Dog’s forecast turns out to be correct and its price-to-earnings (P/E) ratio does not change, what does management expect its stock price to be one year from now?
Business
1 answer:
Novay_Z [31]2 years ago
6 0

Answer:

$21.41

Explanation:

The computation of the stock price one year from now is as follows:

As we know that

Earnings per share = Earnings after tax ÷  Number of shares

= $7,000,000 ÷  5,500,000 shares

= $1.27 per share  

And,

P/E ratio = Current price per share ÷ Earnings per share

= $23 ÷ $1.27

= 18.11

Next Year:

Earnings after tax is

= $7,000,000 ×  1.25

= $8,750,000

Now  

Earnings per share = Earnings after tax ÷  Number of shares

= $8,750,000 ÷  7,400,000 shares

= $1.18 per share  

And,

P/E ratio = Current price per share ÷ Earnings per share

18.11 = Current price per share ÷ $1.18

So, the current price per share is

= $1.18 × 18.11

= $21.41

You might be interested in
A payday loan company charges 6.00 percent interest for a two-week period. What is the annual interest rate? (Do not round inter
Mashcka [7]

Answer:

The annual interest rate is 156  percent

Explanation:

If   6.00 percent interest for a two-week period then annual interest rate =

rate for a two-week period * (52 weeks/ 2 weeks)  = 0,06 * 26 = 1,56

1,56 * 100 =  156  percent for a year period

<u>Note</u>: One year have 52 weeks

8 0
3 years ago
The federal government has assumed a permanent, strong role in the economy, contributing to its stability and efficiency, since
eduard

The answer is during the “1930s”. During the 1930s, the federal government has anticipated a permanent, resilient part in the economy, backing to its firmness and effectiveness. In the 1930s, America experienced the phenomenon known as the “Great Depression”, wherein it was considered to be the extreme economic catastrophe in the nation-state’s whole history. Because of this catastrophe, it stretched out the governing influence of the federal government and the administration’s part in the economy, which resulted into a more firm and effective economy, till this present time.

 

4 0
3 years ago
Given the following list of accounts with normal balances, what are the trial balance totals of the debits and credits?
Alexeev081 [22]

Please see attached image to see the given data.

 

The trial balance totals of the debits and credits are $2,250 debit, $2,250 credit.

 

<span>$1000 (cash) + $500 (Equipment) + $750 (Salaries Expense) = $2,250 Debit

$350 (Accounts Payable) + $900 (Capital) + $1000 (Service Fees) = $2,250 Credit</span>

7 0
3 years ago
Marcus is the director of a small company in Boston. He is trying to obtain parts from a manufacturer in Taiwan but that company
kozerog [31]

Answer:

The correct answer is:  bribery.

Explanation:

Bribery involves an illegal activity where a reward is offered from one party to another(s)  in order to provoke certain favorable behavior. Normally, the bribes are offered to public officials or high range executives to avoid legal responsibilities, or undesired laws or to change the payee point of view on a certain matter being discussed where substantial profits can be obtained.

6 0
3 years ago
Read 2 more answers
The Hawthorne studies began as the type of experiment recommended by Scientific Management. Researchers were trying to find the
3241004551 [841]

Answer:

George Elton Mayo

Explanation:

Based on the scenario being described within the question it can be said that the individual being mentioned is George Elton Mayo. Mayo was an Australian Psychologist who was born on December 26, 1880. Mayo greatly contributed to the creation of the management theory which helped establish modern human relations management methods as well as creating the frame and focus on social dynamics.

5 0
3 years ago
Read 2 more answers
Other questions:
  • If a process produces 1,350 DPMO over the short term, what is the expected Sigma Level over the long term
    14·1 answer
  • Moore's law is often cited in the computer industry because it has held true for over 50 years. what does this rule predict rega
    10·1 answer
  • Arreaga Corp. has a tax rate of 40 percent and income before non-operating items of $928,000. It also has the following items (g
    5·1 answer
  • When its sales were declining, Canadian Airline conducted a marketing survey to understand the expectations of the business trav
    13·1 answer
  • The Hudson Corporation has 7,600 obsolete units of a product that are carried in inventory at a manufacturing cost of $152,000.
    15·1 answer
  • Which of the following is a good condition for bottom-up estimating? A. When the project involves strategic decision making B. W
    13·2 answers
  • In one test before product launch, customers try a sample product and are then surveyed to understand whether they would buy/use
    15·1 answer
  • Bakery A sells bread for $2 per loaf that costs $0.50 per loaf to make. Bakery A gives an 80% discount for its bread at the end
    15·1 answer
  • When participating in fiscal planning, a leader should perform what role?
    12·1 answer
  • Suppose a monopoly firm produces bicycles and can sell 10 bicycles per month at a price of $700 per bicycle. In order to increas
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!