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OverLord2011 [107]
3 years ago
8

A company expects to pay a dividend of $3.50 per share one year from today. the dividend is expected to grow at 30 percent per y

ear for three years. Thereafter, the dividend will grow at 4 percent per year in perpetuity. if the appropriate discount rate for the stock is 13 percent, what is the price of the stock today
Business
1 answer:
monitta3 years ago
7 0

Answer: $70

Explanation:

Price = Present value of year 1 dividend + Present value of year 2 dividend + Present value of year 3 dividend + Present value of year 4 dividend + Present value of year 4 price

Year 4 price = Year 4 dividend / ( Required return - Growth rate after 3 years)

= (3.50 * 1.30³ * 1.04) / (13% - 4%)

= $88.856

Price = (3.50 / (1 + 13%)) + ( (3.50 * 1.3) / 1.13²) + ( (3.50 * 1.3²) / 1.13³) + ( (3.50 * 1.3³) / 1.13⁴) + 88.856/1.13⁴

= $69.97

= $70

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Denise Company manufactures three products from a joint process. Joint costs for the year amounted to​ $250,000. The following d
prohojiy [21]

Answer:

Product X is allocated with 87,500 dollar of the joint cost.

Explanation:

We allocate the values considering the weight of their sales value:

Joint cost: 250,000

We add up the sales values and then calcualte how much each product contributes to that.

Then we multiply that weight or percentage of sales revenue by the joint cost to get the allocated on each product.

\left[\begin{array}{cccc}$Product&$Sales&$Weight&$Cost\\X&70000&0.35&87500\\Y&30000&0.15&37500\\V&100000&0.5&125000\\Total&200000&1&250000\\\end{array}\right]

8 0
3 years ago
John was a high school teacher earning $ 80,000 per year. He quit his job to start his own business in pizza catering. In order
solong [7]

Answer:

Explanation:

Accounting profit

Revenue  Pizza-                      400000

Revenue beverage                 190000

Total revenue                         590000

Cost of sales

Wages (55000*2)                    110000

Pizza ingredients                     50000

Manager                                   75,000

Pizza baker (60000*3)             180000

Equipment                                 10000

Finance cost (50000*6%)         3000

Tuition fee                                  2000

Total expenses                        430000

Accounting Profit                                         160000

Implicit cost

Salary forgone                              80000

Rent forgone                                  12000

Interest on savings (110000*5%)  5500

Total                                               97,500

Economic profit      =(160000-97500)         =62500

I will advise John to return to the teaching Job as he earns more in salary than the economic profit of doing business.

6 0
3 years ago
Company had net income of $265,307. Depreciation expense is $27,888. During the year, Accounts Receivable and Inventory increase
Dafna1 [17]

option D is the correct answer - $254094

<u>Explanation:</u>

<u>As per the given data in the question, the following is used to calculate the net cash from the operating activities. </u>

<u>Net Income = 265307 </u>

Add : Depreciation = 27888

Less Increase in Account receivable = (17637)

Less Increase in Closing stock = ($28123)

Add : Prepaid Expenses ( Decrease) = 2852

Less: Decrease in Accounts payable = (4066)

Add: Loss on sale of Asset ( not Operating in nature) = 7873

Therefore, the Net cash from operating activities = $254094

3 0
3 years ago
According to the​ "rule of​ 70", how many years will it take for real gdp per capita to double when the growth rate of real gdp
slava [35]

14 Years.

The rule of 70 is a measure of how long it takes for something to double. 70 is divided by the rate of growth or rate of return.

70/5% = 14 years

8 0
3 years ago
Dallas Company uses a job order costing system. The company's executives estimated that direct labor would be $3,750,000 (250,00
Zepler [3.9K]

Answer:

Allocated overhead= $1,430,600

Explanation:

Giving the following information:

The company's executives estimated that direct labor would be $3,750,000 (250,000 hours at $15/hour) and that factory overhead would be $1,550,000 for the current period.

The records show that there had been 230,000 hours of direct labor.

Using direct labor hours as a base.

Predetermined overhead rate= total estimated manfacturing overhead for the period/ total amount of allocation base

Predetermined overhead rate= 1555000/250000= $6.22 per hour

Allocated overhead= Predetermined overhead rate*actual hours= 6.22* 230000= $1,430,600

7 0
3 years ago
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