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AVprozaik [17]
3 years ago
11

What would be the maximum an investor should pay for the common stock of a firm that has no growth opportunities but pays a divi

dend of $1.36 per year? The required rate of return is 12.5 percent.
a. $11.24
b. $9.52
c. $10.88
d. $10.64
e. $11.47
Business
1 answer:
e-lub [12.9K]3 years ago
6 0

Answer:

$10.88

Explanation:

Calculation to determine What would be the maximum an investor should pay for the common stock of a firm that has no growth opportunities

Using this formula

Maximum payment for common stock=Dividend/Required rate of return

Let plug in the formula

Maximum payment for common stock=$1.36/.125 Maximum payment for common stock= $10.88

Therefore What would be the maximum an investor should pay for the common stock of a firm that has no growth opportunities is $10.88

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A company purchased land for $96200 cash. Real estate brokers' commission was $3300 and $7200 was spent for demolishing an old b
liq [111]

Answer:

c. $105200.

Explanation:

Cost of land = $96,200

Real estate brokers' commission = $3300

Cost of demolition of old building = $7200

Proceed from salvage of demolition = $1500

Cost of land to be recorded using historical cost principle

= $96,200 + $3300 + $7200 - $1500

= $105,200

Option c. $105200 is right.

6 0
4 years ago
Oficina Bonita Company manufactures office furniture. An unfinished desk is produced for $37.65 and sold for $65.35. A finished
antiseptic1488 [7]

Answer:

Alternative 1 $27.7

Alternative 2 $30.25

Differential effects $2.55

Explanation:

Preparation of a differential analysis

DIFFERENTIAL ANALYSIS

Sell unfinished desks(Alternative 1 ) Process further into finished desks (Alternative 2) Differential effect (Alternative 2)

Revenue per desk $65.35 $74.50 $9.15

($74.50-$65.35=$9.15)

Cost per desk - $37.65 -$44.25 -$6.60

($37.65+$6.60=$44.25)

Profit /Loss per desk $27.7 $30.25 $2.55

($65.35 - $37.65=$27.7)

($74.50-$44.25=$30.25)

($9.15-$6.60=$2.55)

Therefore the company should process further and sell finished desks because it yields incremental Profit per desk.

3 0
3 years ago
In 2002 the u.s. had a gpd (gross domestic product) of $10.5 trillion. what does that mean
olganol [36]
Thats how much product was produced and sold in the united states 
3 0
3 years ago
An unregulated natural monopolist will produce select one:
Kaylis [27]

Answer:

b. at the quantity where marginal cost equals the long run average cost curve.

Explanation:

This point will be the most effective to produce at after this point the shutdown point would be reached at surpassed.

6 0
4 years ago
In understanding and analyzing "demand," we focus on how much of a product the buyers are select one:
goldfiish [28.3K]
<span>In understanding and analyzing "demand," we focus on how much of a product the buyers are D. willing and able to buy.
It doesn't really matter whether customers want to buy something if they cannot afford it. This is why companies always try to make their products affordable so that most people can buy them. So, depending on how much money a person has, they will be allocate some of it to buy that particular product.
</span>
7 0
4 years ago
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