Based on the other transactions, the amount of dividends that was paid that year was <u>$158,704.</u>
<h3>After tax Net income </h3>
= Taxable income x ( 1 - tax)
= 198,600 x ( 1 - 21%)
= $156,894
<h3>Dividends during year</h3>
= Opening retained earnings + After tax income - Closing retained earnings
= 318,750 + 156,894 - 316,940
= $158,704
In conclusion, the dividends paid were $158,704.
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The best estimate of the current stock price is $48.31.
<h3>
What is dividend?</h3>
Dividend refers to the profit earned after reducing all the expenses and the cost. The dividend is the money distributed to the stakeholders by the company.
According to the above case, The pineapple Company earned the dividend of $1.75 and growth rate is constant at the rate of 25% for 2 years.
The best price estimate of the current stock = =[$1.75(1.25)2(1.06)]/(0.12-0.06)
= $48.31.
The best estimate of the current stock price is $48.31.
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Answer:
The expenses of the finance lease and operating lease are equal
Explanation:
A lease is an agreement wherein the the lessor allows the lessee to use an asset for a fixed period in return for periodical lease rentals.
Leases are of two types, operating and finance. In the latter, the lessee has the option to buy the asset on lease, at the end of the lease term at a very reduced value. In case of operating lease, the lessor remains the owner upon the termination of lease.
Expenses refer to lease rental payments made by the lessee to the lessor. Considering, the lessor wants a desired rate of return from leasing activity, the lease rentals under both would be structured to give him the same desired return.
This means, the expenses of both finance and operating lease would be equal.
