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vodomira [7]
3 years ago
12

Kellogg Co. (K) recently earned a profit of $2.22 earnings per share and has a P/E ratio of 19.35. The dividend has been growing

at a 6 percent rate over the past few years. If this growth rate continues.
Required:
a. What would be the stock price in four years if the P/E ratio remained unchanged?
b. What would the price be if the P/E ratio declined to 16 in four years?
Business
1 answer:
shutvik [7]3 years ago
7 0

Answer and Explanation:

The computation is shown below:

The following formula should be used

= P/E ratio × EPS × (1 + growth rate)^n umber of years

a. The stock price in four years is

= $19.35 × $2.22 × (1 + .06)^4

= $54.23

b. The stock price in four years in the case when the P/E ratio fall to 16

= $16 × $2.22 × (1 + .06)^4

= $44.84

We simply applied the above formula so that the correct price could come

And, the same is to be considered

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An increase in price causes an increase in total revenue when demand is
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Answer:

elasticity of demand will be inelastic

Explanation:

Here in the question it is provided in the statement that with an increase in price there is an increase in total revenue

Therefore,

change in price and change in revenue will be positive

Mathematically,

\frac{dR}{dP} > 0

Now,

When,

\frac{dR}{dP} > 0

then,

the elasticity of demand will be Ed will be < 1

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7 0
2 years ago
When Palm, Inc. acquired its 100% investment in Star Co., a foreign entity, the excess of cost over book value was 10,000 FC. Th
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Answer:

A. debit to Patent for 10,000FC multiplied by the current exchange rate.

Explanation:

Since the excess of cost over book value was 10,000FC and this excess was traceable to a 10-year patent.

The elimination entry to amortize the excess will include a debit to Patent for 10,000FC multiplied by the current exchange rate assuming the foreign entity's local currency is its functional currency.

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3 years ago
An operations costing system is:
frosja888 [35]

Answer:

C. An operations costing system is the same as job  order costing system except that materials are accounted for in the same way as they are in process costing system

Explanation:

Operation costing is a hybrid of both job costing and process costing which can either used for:

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Answer: Unearned warranty revenue

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Unearned warranty revenue is usually shown as an unearned revenues in the accrued liabilities during the preparation of the balance sheets.

It should be noted that the unearned warranty revenue is a characteristic of both the sales approach for service-type warranties and the expense approach for assurance-type warranties.

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What is the most important thing that a venture capitalist is looking for in a company to invest in? discuss your response.
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Simply said, management is by far the most crucial aspect for astute investors. VCs invest mostly in the management team's capacity to carry out the company plan. You need a solid understanding of your market, a tested business plan, and a well-thought-out strategy for approaching venture investors if you want to distinguish out from other businesses.

In addition to this, VCs value intellectual honesty and self-awareness in founders. He has discovered from his experience as an investor that "those who are very introspective, recognize their strengths and flaws" have a higher likelihood of founding and eventually developing a successful firm.

To learn more on venture capitalist

brainly.com/question/15079917

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