Answer:
At a growth rate of 1%, price of share $2.78
At a growth rate of 3%, price of share $3.57
At a growth rate of 5%, price of share $5.00
At a growth rate of 7%, price of share $8.33
At a growth rate of 9%, price of share $25.00
Explanation:
The formula for computing share price at each growth rate is dividend/(rate of return-growth rate) as shown in the attached spreadsheet.
Note that the higher the dividend growth rate the higher the share price as share price was at the highest at a growth rate of 9%
The average score is 91.4%
Answer:
a. The anticipated break-even sales (units): 20,200 units
b. The sales (units) required to realize operating income of $124,200: 24,800 units
Explanation:
a. The break-even point is the level of production at which the costs of production equal the revenues for a product and calculated by using following formula:
Break-even point in units = Fixed expense/(Selling price per unit-Variable expense per unit) = $545,400/($82 - $55) = 20,200 units
b. The number of units must be sold to meet the target profit figure are calculated by using following formula:
The number of units must be sold = (Total fixed cost + Targeted profit) / Contribution margin per unit.
Contribution margin per unit = Sales price per unit – Variable cost per unit = $82 - $55 = $27
The number of units must be sold = ($545,400 + $124,200)/$27 = 24,800 units