A good example of vertical integration is

Destin Corp is comparing three different capital structures. Plan A would result in 10,000 shares of stock and $90,000 in debt.

Kobotan [32]

Answer:

All equity plan (12,000 shares with an EPS of $2.40)

Explanation:

Plan A (10,000 shares):

interest = $90,000 x 10% = $9,000

net income = (ebit - interest) x (1 - 40%) = ($48,000 - $9,000) x 60% = $23,400

earnings per share (EPS) = $23,400 / 10,000 shares = $2.34 per share

Plan B (7,600 shares):

interest = $198,000 x 10% = $19,800

net income = (ebit - interest) x (1 - 40%) = ($48,000 - $19,800) x 60% = $16,920

earnings per share (EPS) = $16,920 / 7,600 shares = $2.23 per share

All equity plan (12,000 shares):

net income = ebit x (1 - 40%) = $48,000 x 60% = $28,800

earnings per share (EPS) = $28,800 / 12,000 shares = $2.40 per share

5 0

4 years ago

Hoffman, Inc. adjusts its books each month but closes its books at the end of the year. The trial balance at March 31 before adj

serious [3.7K]

Answer:

$22,020

Explanation:

Given, (Before Adjustment)

Unearned Service Revenue $6,600

Service revenue $17,190

The adjusting entry to record the expired unearned revenue is

Debit Unearned Service Revenue $4,830

Credit Service revenue $4,830

Therefore, the amount of Service Revenue Earned to be reported in the March income statement is as follows:

Service revenue before adjustments = $17,190

Unearned Service Revenue earned in March = $4,830

Service revenue after adjustment = $22,020

5 0

3 years ago

Which of the following accurately explain the importance of the ceteris paribus assumption for an economic model? Check all that

ladessa [460]

Answer:

The correct answer is: It allows economists to isolate or focus attention on selected variables.

Explanation:

The word ceteris paribus means other things being constant. The working of an economy is very complex, each variable is affected by a number of variables. It is difficult to understand all the complex relationships at the same time.

The assumption of ceteris paribus or other factors being constant helps the economists in isolating the variables that they want to study while keeping others constant.

It simplifies the study of economic models and helps to easily grasp the working of the economy.

5 0

3 years ago

Suppose a firm has a retention ratio of 40 percent and net income of $5.5 million. how much does it pay out in dividends? (enter

poizon [28]

Total sales = $200,000. Net income = $20,000. Dividend payout ratio = 30%. Operating cash flow = $40,000. Price per share = $100. Shares outstanding = 1,000.

<h3>What is Dividend payout ratio?</h3>

Investors can get a sense of a company's dividend payout ratio by comparing it to the amount of money it maintains on hand for growth, debt repayment, and cash reserves.

Using the data available at the bottom of a company's income statement, this ratio can be determined quickly. The dividend yield, on the other hand, contrasts the dividend payment with the stock price of the company at the time of the comparison.

How much is paid out in dividends can be determined using the dividend payout ratio.

This computation enables businesses to determine how much cash is available (after dividends are paid) for debt repayment or reinvested.

The income statement of a corporation is used to compute this ratio.

To learn more about Dividend payout ratio from the given link:

brainly.com/question/16102531

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5 0

2 years ago

In the ________ stage of the industry life cycle, the emphasis on product design is very high, the intensity of competition is l

yanalaym [24]

Answer:

The correct answer is letter "C": introduction.

Explanation:

American economist Raymond Vernon (1913-1999) proposed the Industry Life Cycle model in which he displayed there are five (5) stages for that process: introduction, growth, shakeout, maturity, and decline.

In the introduction stage, the product demand is low because the market is not familiar with it yet. As a result, competitors do not consider the entity as a relevant rival and, growth is limited. The firm's supply chain is still being schemed and even the product being offered is being adapted according to the feedback the company receives.

3 0

4 years ago