PLEASE HELP ME I AM STUCK

PRO FORMA INCOME STATEMENT Austin Grocers recently reported the following 2016 income statement (in millions of dollars): Sales

padilas [110]

Answer:

Net income = $169.2

Growth in dividend = 76.25%

Explanation:

The projected figures are as below:

Sales = $700 x (1 + 15%) = $805 (15% increase in sales)

Operating costs including depreciation = $805 x 60% = $483 (60% of sales)

Interest expense = 40 (remain constant)

EBIT = Sales - Operating costs including depreciation = $805 - $483 = $322

EBT = EBIT - Interest expense = $322 - $40 = $282

Net income = EBT x (1 - Tax rate) = $282 x (1 - 40$) = $169.2

Dividend = Net income x Dividend payout ratio = $169.2 x (32/96) = $56.4

Growth in dividend = $56.4/$32 = 76.25%

4 0

3 years ago

If the demand for a steak is unit price elastic, then; Select one: a. the percentage change in quantity demanded is equal to the

Anvisha [2.4K]

Answer:

The correct answer is option a.

Explanation:

The price elasticity of demand shows the responsiveness of quantity demanded to change in price. It is measured by the ratio of proportionate change in quantity demanded and proportionate change in price.

Unit price elastic means that the price elasticity of the good is 1. This implies that the percentage change in quantity demanded must be equal to the percentage change in price.

6 0

3 years ago

Most canadian businesses have more than five employees? True or false

erik [133]

True true true true true true true

5 0

3 years ago

On January 1, a company issued 6%, 10-year bonds with a face amount of $60 million for $55,736,520 to yield 7%. Interest is paid

Olegator [25]

Answer:

Effective interest on June 30 on a 6% $60 million bond at 7% effective rate is $1,950,778

The interest is treated in the books of account thus:

Debit interest expense $1,950,778

Credit Bond account $1,950,778

Explanation:

The effective interest is computed using the below formula

Amount x Effective Rate (%) = Interest Expense

Amount=$55,736,520

Effective rate =7%/2 =3.5% semi-annually

Interest expense=$55,736,520*3.5%

Interest expense=$1,950,778

6 0

3 years ago

In the challenging world of retail sales, Macy's, Inc.'s (M's) revenues are declining while expenses are generally flat. Based o

Papessa [141]

Answer

a) Gordon's Constant Growth model : P0 = D1 / (r-g)

r = 3% =0.03 , g= -7% = -0.07 , D0 = $5.1

D1 = D0*(1+g)

D1 = 5.1*(1-0.07)

D1 = $4.743

P0 = 4.743/(0.03- (-0.07))

P0 = 4.743/0.10

P0 = $47.43

So, Stock M should sell at a price of $47.43 today

b) Price 8 years from now

==> P8 = D9/(r-g)

P8 = D0*(1+g)^9/(r-g)

P8 = 5.1* (1-0.07)^9 / (0.03- (-0.07))

P8 = 5.1*0.52041108298 / (0.03- (-0.07))

P8 = 2.65410

P8 = $26.54

c) Investor may want to buy the stock today for the Dividends. If the dividends paid are high enough, the present value of the dividends is also high and may more than compensate the fall in stock price. This type of stocks work and give cash flows like a project where the initial cashflows are higher and later cashflows are less because of market factors.

8 0

2 years ago