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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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The properly marked source document states:
Mariana [72]

Answer:

B. Contained in

Explanation:

Base on the scenario been described in the question, the concept that is used to derivatively classify the statement in the new document is contained in

Contained in can be said to a classified statement in a new document

4 0
3 years ago
The Southern Corporation manufactures a single product and has the following cost structure: Variable costs per unit: Production
Blizzard [7]

Answer:

$3,500

Explanation:

Under variable costing method, product costs are calculated on variable manufacturing  costs only.

Step 1 : Determine unit Product Cost

Product Cost = Variable Manufacturing Costs

                      =  $ 35

Step 2 : Determine the units in Inventory

Units in Inventory = Opening Stock + Production - Sales

                              = 0 +  7,210 - 7,110

                              = 100 units

Step 3 : Determine Inventory value

Inventory value = Units x Cost per unit

                           = 100 units x $ 35

                           = $3,500

Conclusion :

the ending inventory of finished goods under variable costing would be: $3,500

3 0
3 years ago
This year Ed celebrated his 25th year as an employee of Designer Jeans Company. In recognition of his long and loyal service, th
Crank

Answer:

$2,490

Explanation:

Based on the information given we were told that in order for the company to recognize his long as well as loyal service they awarded Ed a gold watch worth the amount of $105 which as well include the amount of $2,490 as cash bonus which means that the amount that Ed must include in his gross income will be the cash bonus amount of $2,490.

Therefore the amount that Ed must include in his gross income is $2,490

4 0
3 years ago
Pat maninen earns a gross salary of $3,000 each week. assume a rate of 6.2% on $118,500 for social security and 1.45% for medica
Sonbull [250]
Answer:

Social Security = $186.00
Medicare = $43.50

Explanation:

Since the given rate for Social security is 6.2%, the first week deduction is 6.2% of gross weekly salary, which is $3,000. Hence, the first week deduction for Social Security is given by

Social Security Deduction = 6.2% of $3,000
                                          = 0.062 × 3,000 (Change 6.2% to decimal)
                                          = $186.00

Similarly, since 1.43% is the given rate for medicare, the first week deduction is 1.43% of the gross weekly salary, which is $3,000. Thus, the first week deduction for medicare is given by

Medicare Deduction = 1.43% of $3,000 
                                 = 0.0143 × 3,000
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7 0
3 years ago
Indicate whether the following actions would increase, decrease, or not affect Indigo Inc.'s total assets, liabilities, and stoc
Elenna [48]

Explanation:

The effects are as follows:

a. In the first option, there is No effect in any item of the financial statements

b. In the second option, there is  No effect in any item of the financial statements

c. In the third option, there is No effect in any item of the financial statements

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The journal entry is shown below:  

Retained earning A/c Dr  XXXXX

    To Dividend payable  A/c XXXXX

(Being cash dividend declared)  

When the dividend is declared, the dividend amount should be subtracted from the retained earning account.  

And, since the dividend is declared that increases the balance of dividend

In addition, the dividend payable and the retained earning account have a credit balance. The increase in dividend payable account would have credit balance whereas the decrease in retained earning account has a debit balance.  

e. Paying the cash dividend declared in (d)        

The journal entry is shown below:

Dividend payable A/c XXXXX

           To Cash A/c XXXXX

(Being the cash dividend is paid)

Since it reduces the liabilities and the asset side also but it does not have any impact on the stockholder equity

7 0
3 years ago
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