The equality pilosophy base on available budget, the exchange pilosophy is based on profit margins.
The equality pilosophy is based on fairness, the exchange pilosophy is based on employee value
Complete Question:
BenchMark, Inc., just paid a dividend of $3.45 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 13 percent on the stock for the first three years, a return of 11 percent for the next three years, and then a return of 9 percent thereafter. What is the current share price for the stock.
Answer:
BenchMark, Inc.
The current share price for the stock is:
$43.13
Explanation:
a) Data and Calculations:
Dividend per share = $3.45
Growth rate = 5%
Investors' required rate of return = 13%
Stock value = Dividend per share / (Required Rate of Return – Dividend Growth Rate)
= $3.45/(0.13 - 0.05)
= $43.13
b) We can calculate BenchMark's current share price, by dividing the dividend per share by the investors' required rate of return after subtracting the growth rate from the required rate of return.
Answer:
The raw material inventory turnover is 9.2 times or 40 days
Explanation:
This problem requires us to compute raw material inventory turnover. The inventory turnover ratio is calculated by dividing the inventory used for a period by the average inventory for that period. Average inventory is used instead of ending inventory because many companies' merchandise fluctuates greatly throughout the year.
So RM inventory turnover = RM used/Average inventory
= 104,600/11,350*
= 9.2 times or 40 days**
* Average inventory = (9,900+ 12,800)/2
** (365/9.2) = 40 days
Answer:
(i) $1,295 Favorable
(ii) $3,744 Unfavorable
Explanation:
Actual price = Actual cost of materials ÷ Actual materials purchased
= $43,105 ÷ 3,700
= $11.65
Materials price variance = Actual Quantity (Actual Price - Standard Price)
= 3,700($11.65 - $12.00)
= $1,295 Favorable
Standard Quantity = Actual output × Standard quantity per unit of output
= 560 × 4.8
= 2,688
Materials quantity variance:
= Standard Price (Actual Quantity - Standard Quantity)
= $12.00 (3,000 - 2,688)
= $3,744 Unfavorable
