Answer:
8.74%
Explanation:
Calculation for the expected return of this preferred stock
First step is to find the Annual dividend using this formula
Annual dividend= Par value x Dividend rate
Let plug in the formula
Annual dividend=$90 par value×8.25% dividend rate
Annual dividend=7.425
Second step is to calculate for the expected return of the preferred stock
Using this formula
Expected return=Annual dividend/Current price
Let plug in the formula
Expected return=7.425/$85
Expected return=8.74%
Therefore the expected return of this preferred stock will be 8.74%
A registered representative with a wealthy clientele has many clients that are officers of publicly held companies. The registered representative receives an order from the executive vice-president of ADAP Corp. to sell 4% of the outstanding shares. Prior to placing this order, the registered representative may, in his or her personal account,:__________.
Answer:
buy ADAP common stock
Explanation:
Prior to placing this order, the registered representative may, in his or her personal account, buy ADAP common stock. This is because the representative would be buying against ADAP Corp and therefore the market. The representative cannot Sell ADAP common stock because doing so after having received this information would be considered "Insider Trading" which is illegal since the 4% that the company is selling will most likely cause a dip in price of the shares in the market.
Review the critical external and internal environmental factors that have strategic implications in the future for Coca Cola1. Are Coca Cola recipients or creators of the market for their products? Why? How is this factored into the decisions of each firm?2. What recommendations can you make to the task force to enhance the effectiveness of Coke's strategy or change the strategic approach for better results?
Answer with Explanation:
Requirement 1.
First of all we will do SWOT analysis to develop an understanding of the company.
The Strengths of Coca Cola are as under:
Great brand recognition worldwideHighly valued company worldwideOperational in 200 countries across the globeLargest market share in cold beveragesHuge Customer FanSo many acquisition in last 10 yearsThe weaknesses of the company are as under:
Less diversified productsNot recommended by the doctors because of its adverse impact on health. Well known for its environmental issues which includes devastating effect on environment, violation of worker's rights in many countries, usage of water in different communities is so much high that it effects the local farmers.Aggressive competition with Pepsi has effected Coca Cola business operations and profits.The opportunities that must be exploited by the Coca Cola company are as under:
Diversification of products will help the company to grow its market share and improved profits.Specially focus on sales and marketing department in countries which are near the equator because the consumption of cold drinks here is more than countries with cold climate. Package beverages with environmentally friendly material to abandon single use plastic.Improving Supply chain management will increase benefits drawn because of its presence in almost 200 countries.The threats that Coca Cola faces is as under:
Environmental Issues which includes use of single use plastics, water controversy, etc.Raw material resourcing uncertaintyIndirect competitions which includes thousands of Local players in different states across the globe.Requirement 2.
No doubt they are the creators of the market. They set principles for aggressive marketing that was very helpful in gaining market share due to product design that encourage customer to buy, Brand design, Logo and Font, Simplicity of bottles, etc.
These factors are incorporated in each firm's decision making programs and is the reason why it enables the product acceptance by a wide majority of customers. Though the marketing strategy for every single product is different and is largely dependent on the location and availability of the product.
Requirement 3.
Following are some recommendations to Coca Cola Company:
Coca Cola Company must step into food market not because it would help in managing its supply chain but it will also help in building a more diversified product ranges.Infrastructure development which would include franchises of Coca cola that will help it to develop McDonald's like offerings of it own that only offers Coca Cola products. This will increase the market share of Coca Cola company increase its brand recognition as well. Furthermore, it can also add value to its franchises by use of special offers that would increase its franchise sales.The company must resolve its environmental issues to increase its share value as nowadays Dow's and S & P adds value to market price of shares of companies that are environmental friendly. Marketing and distribution team of gulf countries must be given additional budget to increase their sales as their is great demand of products here.Coca cola must introduce health benefiting drinks that they can recommend children to taste as frequent consumption of cold drinks are not recommended by the doctors.The reality of consumer optimum means making choices in countless purchases in order to enjoy:______.
a. roughly the same utility per dollar spent.
b. the same level of satisfaction in each.
c. the same standard of living.
d. increasing degrees of satisfaction.
e. a balanced budget.
Answer:
a. roughly the same utility per dollar spent.
Explanation:
A consumer optimum can be defined as the combination of finished goods and services which typically maximizes satisfaction (utility) for the consumers of various goods and services at a specific income and product prices.
The reality of consumer optimum means making choices in countless purchases in order to enjoy roughly the same utility per dollar spent.
For example, a customer who wishes to obtain maximum satisfaction, utility or value for his or her money (dollar spent) may decide to buy a variety of goods such as milk, donuts, biscuits, chocolate, cheese etc
Onslow Co. purchases a used machine for $192,000 cash on January 2 and readies it for use the next day at an $6,000 cost. On January 3, it is installed on a required operating platform costing $1,200, and it is further readied for operations. The company predicts the machine will be used for six years and have a $23,040 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its fifth year in operations, it is disposed of.
1.Prepare journal entries to record the machine's purchase and the costs to ready and install it. Cash is paid for all costs incurred.
Entry #1. Record the purchase of a used machine for $192,000 cash.
Entry #2. Record the costs of $6,000 cash incurred on the used machine.
Entry #3: Record the cost of $1,200 for an operating platform.
2. Prepare journal entries to record depreciation of the machine at December 31.
Entry #1Its first year in operations : Record the year-end adjusting entry for the depreciation expense of the used machine.
Entry#2 The year of its disposal : Record the year-end adjusting entry for the depreciation expense of the used machine.
3. Prepare journal entries to record the machine's disposal under each of the following separate assumptions:
Entry #1: Record the sale of the used machine for $23,000 cash.
Entry #2: Record the sale of the used machine for $92,000 cash.
Entry #3: Record the destruction of the used machine in a fire with $33,500 cash insurance settlement.
Answer:
Onslow Co.
1. Journal Entries:
Entry #1. Record the purchase of a used machine for $192,000 cash.
Jan 2:
Debit Plant $192,000
Credit Cash Account $192,000
To record the purchase of the used machine.
Entry #2. Record the costs of $6,000 cash incurred on the used machine.
Debit Plant $6,000
Credit Cash Account $6,000
To record the cost for readying it for use.
Entry #3: Record the cost of $1,200 for an operating platform.
Debit Plant Operating Platform $1,200
Credit Cash Account $1,200
2. Journal Entries for Depreciation:
Entry #1 Its first year in operations : Record the year-end adjusting entry for the depreciation expense of the used machine.
December 31, Year 1:
Debit Depreciation Expense $29,160
Credit Accumulated Depreciation $29,160
To record depreciation expense for the year.
Entry#2 The year of its disposal : Record the year-end adjusting entry for the depreciation expense of the used machine.
Year 5 December 31:
Debit Depreciation Expense $29,160
Credit Accumulated Depreciation $29,160
To record the depreciation expense for the year.
3. Journals Entries;
Entry #1: Record the sale of the used machine for $23,000 cash.
Debit Cash Account $23,000
Credit Plant Disposal $23,000
To record the cash receipt from the sale.
Debit Plant Disposal $198,000
Credit Plant $198,000
To record the transfer of machine sold.
Debit Accumulated Depreciation $145,800
Credit Plant Disposal $145,800
To record the transfer of balance to Sale of Machine.
Entry #2: Record the sale of the used machine for $92,000 cash.
Debit Cash Account $92,000
Credit Plant Disposal $92,000
To record the cash receipt from the sale.
Entry #3: Record the destruction of the used machine in a fire with $33,500 cash insurance settlement.
Debit Cash Account $33,500
Credit Plant Disposal $33,500
To record the cash receipt from insurance.
Explanation:
a) Data and Calculations:
Cost of machine = $192,000
Readying cost = 6,000
Total = $198,000
Useful life = 6 years
Salvage value = $23,040
Depreciable amount $174,960
Depreciation per year = $29,160 ($174,960/6)
Accumulated Depreciation after 5 years = $145,800 ($29,160 x 5)
Book value after 5 years = $52,200
Method of Depreciation = Straight-line
ABC reports net income and sales for the year of $65,000 and $1,300,000, respectively. Return on equity is 10%. What is ABC's average Stockholders' Equity for the year?
Answer:
ABC's average Stockholders' Equity for the year is $650,000
Explanation:
Return on Equity = Net income / Average Equity
Hence, average equity = 65,000 / 10%
= $650,000
Calculate the amount realized at the end of 7 years through annual deposits of $1000 at 10% compound interest
Answer:
$9,487.17
Explanation:
The computation of the amount realized at the end of 7 years is shown below;
It can be determined by two methods, first is this one
Future value = $1,000 × 1.10^6 + $1,000 × 1.10^5 + … + $1,000 × 1.10 + $1,000
= $1,000 × (1.10^7 - 1) ÷ 0.10
= $1,000 × 9.48717
= $9,487.17
The second one is shown in the attachment
In both methods, the answers are the same
Suppose you are the money manager of a $2 million investment fund. The fund consists of four stocks with the following investments and betas. Stock Investment Beta A $ 200 000 1.50 B $ 300 000 -0.50 C $ 500 000 1.25 D $1000 000 O.75
If the market required rate of returns is 28 and the risk-free is 12%:
Calculate:
i. Stock A required rate of return
ii. Stock B required rate of return
iii. Stock C required rate of return
iv. Stock D required rate of return
v. What is the Fund’s required rate of return?
Answer:
5 ms
Explanation:
A monopolist sells in two geographically divided markets, the East and the West. Marginal cost is constant at $50 in both markets. Demand and marginal revenue in each market are as follows:
QE = 900 - 2PE
MRE = 450 - QE
QW = 700 - PW
MRW = 700 - 2QW
a. Find the profit-maximizing price and quantity in each market
b. In which market is demand more elastic?
Answer:
A) QE = 400, PE = 250
QW = 325, PW = 375
b) east market has more elastic market demand
Explanation:
Given data :
Marginal cost = $50 ( both markets )
demand and marginal revenue in each market are given differently
a) Determine/find the profit-maximizing price and quantity in each market
For east market :
50 = 450 - QE
hence QE = 450 -50 = 400
since QE = 400 ( quantity for east market )
400 = 900 - 2PE
PE = 250 ( PROFIT maximizing price for east market )
For west market
50 = 700 - 2QW
Hence QW = 325
since QW = 325
325 = 700 - pw
PW = 375
B) The market in which demand is more elastic is the east market because the quantity demanded is higher and also the profit maximizing price is lower as well
Adam, Ben and Erica are liquidating their partnership. Before selling the assets and paying the liabilities, the capital balances are Adam $41,000, Ben $31,000 and Erica $20,000. The profit and loss sharing ratio has been 1:1:2 for Adam, Ben and Erica, respectively. The partnership has $72,000 cash, $40,000 non-cash assets, and $20,000 accounts payable. Requirement 1. Assuming the partnership sells the non-cash assets for $50,000, how much cash will each partner receive in final liquidation? Requirement 2. Assuming the partnership sells the non-cash assets for $25,000, how much cash will each partner receive in final liquidation?
Answer:
Adam = $41,000 , Ben = $31,000 , Erica =$20,000
Profit and loss sharing Ratio respectively =1:1:2
Requirement 1
Cash available $72,000
Add: Cash received from sale of $50,000
non-cash assets
$122,000
Less: Cash paid against account $20,000
receivables
Cash to be distributed $102,000
Distribution
Adam= $102,000 * 1/4 = $25,500
Ben = $102,000 * 1/4 = $25,500
Erica = $102,000 * 2/4 = $51,000
Requirement 2
Cash available $72,000
Add: Cash received from sale of $25,000
non-cash assets
$97,000
Less: Cash paid against account $20,000
receivables
Cash to be distributed $77,000
Distribution
Adam= $77,000 * 1/4 = $19,250
Ben = $77,000 * 1/4 = $19,250
Erica = $77,000 * 2/4 = $38,500
Fifty percent of an HIM department’s staff have a nationally recognized credential. This is an example of what type of indicator: A. Structure B. Process C. Outcome D. Internal
Answer: A. Structure
Explanation:
Structure Indicators provide information about the ability and capacity of a Health care provider to be able to give health care services that are of high quality.
They focus on the processes the Health Care provider uses, the systems in place and their capacity to provide certain types of care.
Some indicators include; How many providers do they have versus the number of patients they have and the number of certified physicians that they have.
Having a HIM department with 50% of staff accredited is therefore a Structure indicator.
Campbell Clothing produces men's ties. The following budgeted and actual amounts are for 2016:
Cost Budget at 5,000 Units Actual Amounts at 5,800 Units
Direct materials $60,000 $71,000
Direct labor 75,000 86,500
Equipment depreciation 5,000 5,000
Indirect labor 7,500 8,600
Indirect materials 9,000 9,600
Rent and insurance 12,000 13,000
Instructions:
Prepare a FLEXIBLE performance budget report for Campbell Clothing for the year.
Answer:
Campbell Clothing
Manufacturing Performance budget Report
For the year ended December 31, 2016
Budget Actual Difference
Direct materials $69,600 $71,000 $1,400 U
Direct labor $87,600 $86,500 $500 F
Equipment depreciation $5,000 $5,000 $0 Nil
Indirect labor $8,700 $8,600 $100 F
Indirect materials $10,440 $9,600 $840 F
Rent and insurance $12,000 $13,000 $1000 U
Total Costs $192,740 $193,700 $960 U
Workings
Planning budget
Direct materials 60,000 * $12 = $69,600
Direct labor 75,000 * $15,000 = $87,600
Equipment depreciation 5,000
Indirect labor 7,500 * $1.50 = $8,700
Indirect materials 9,000 * $1.80 = $10,440
Rent and insurance $12,000
What is the bullwhip effect and how does it relate to lack of coordination in a supply chain?
Answer:
The bullwhip effect happens when retailers or other members of the supply chain overestimate a sudden increase in demand, and this causes a chain reaction in all the other participants of the supply chain that start requesting higher quantities of goods or materials for production. E.g. the fidget spinner was a very popular fad and its producers probably didn't anticipate how large the demand would be. Once the product became extremely popular, everyone wanted to sell fidget spinners. This caused an increase in the order quantities of all the supply chain. Once the fad faded out, all this momentum stopped and many stores, distributors, wholesalers, and even factories were left with huge unsold stocks of fidget spinners.
When the supply chain is well coordinated, there is little chance for some retailers or distributors to over react and want more product just in case. If your supply is guaranteed, then it would take some extraordinary increase in demand to make you want to increase your purchase orders. But if your supply chain is not well coordinated, you might fear that you will lose a lot of sales and other competitors will make them. Then you get anxious and start ordering large quantities.
A Treasury bond due in one year has a yield of 5.7%; a Treasury bond due in 5 years has a yield of 6.2%. A bond issued by Ford due in 5 years has a yield of 7.5%; a bond issued by Shell Oil due in one year has a yield of 6.5%. The default risk premiums on the bonds issued by Shell and Ford, respectively, are:__________. a. 1.0% and 1.2% b. 1.2% and 1.0%. c. 0.7% and 1.5%. d. 0.8% and 1.3%.
e. None of the options are correct
Answer:
d. 0.8% and 1.3%.
Explanation:
The default risk premiums on the bonds issued by Shell = 6.5% - 5.7% = 0.8%
The default risk premiums on the bonds issued by Ford = 7.5% - 6.2% = 1.3%
Hence, the default risk premium issued by Shell and Ford respectively are 0.8% and 1.3%
Which of the following would NOT cause an increase demand for iPhones? Group of answer choices price of comparable Android phones increases price of iPhones decreases income of possible customers increases price of data plans decreases
Answer:
price of iPhones decreases
Explanation:
A decrease in price increases quantity demanded but does not increase demand.
iPhones and Android phones are substitute goods.
Substitute goods are goods that can be used in place of another good.
An increase in the price of androids increases the cost of androids. So, consumers would increases their demand for iPhones.
Because iPhone is assumed to be a normal good. An increase in the price of iPhones would increase the demand for the good.
Normal goods are goods that are goods whose demand increases when income increases and falls when income falls
Data plans and iPhones are complement goods.
Complementary goods are goods that are consumed togethe
A decrease in the price of data plans would increase the demand for iPhones.
Gain is generally recognized in an asset distribution to a partner. True False
Answer:
False
Explanation:
Usually distributions reduce a partner's outside basis in a partnership, they are generally not considered income. Since most distributions are not considered income, they do not result in gains for the partner. Some distributions may result in gains, such as certain cash distributions or securities (bonds) distributions. It is uncommon for a gain to result from property being distributed.
Presented below is a partial amortization schedule for Premium Foods:
Period Issue Date Cash Paid Interest Expense Decrease in Carrying Value Carrying Value
$ 85,959
1 $ 2,900 $ 2,586 $ 314 85,645
2 2,900 2,578 322 85,323
1. Record the bond issue assuming the face value of bonds payable is $76,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2. Record the first interest payment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Please Note the table for better understanding
Period Issue Cash Paid Interest Expense Decrease in Carrying
Date Carrying Value Value
$85,959
1 $2,900 $2,586 $314 $85,645
2 $2,900 $2,578 $322 $85,323
1) Journal Entry Debit Credit
Cash A/C $85,959
To Premium on Bonds payable $9,959
To Bonds Payable $76,000
2) Journal Entry Debit Credit
Interest Expense $2,586
Premium on Bonds Payable $314
To Cash $2,900
Your client holds 1 listed XYZ August 50 call. A cash dividend of $2.50 per share is declared. On the ex-date, the terms of the call are: (A) Exercise Price: $47.50, Number of Underlying Shares per Contract of XYZ: 102 (B) Exercise Price:$50.00, Number of Underlying Shares per Contract of XYZ: 100 (C) Exercise Price: $52.50, Number of Underlying Shares per Contract of XYZ: 97 (D) Exercise Price: $52.50, Number of Underlying Shares per Contract of XYZ: 102
Answer:
(B) Exercise Price:$50.00, Number of Underlying Shares per Contract of XYZ: 100
Explanation:
The declaration of the dividends will not affect the exercise price of the call, it will still be $50 per stock. Also, the number of stocks included in the call will not change because a cash dividend is declared, they will still be 100 stocks included in the call contract. The cash dividend affects the market price of the stock, but not the call or put options.
On November 1, Year 1, Noble Co borrowed $80,000 from South Bank and signed a 12% six month note payable, all due at maturity. The interest on this loan is stated separately. How much must Noble pay South Bank on May 1, Year 2, when the note matures?
a. $84,000
b. $89,600
c. $82,400
d. $80,000
Answer: answer is not in the option.
Correst answer -Noble must pay South Bank on May 1, Year 2, when the note matures, $84,800
Explanation:
Interest accrued = Principal(amount borrowed) x rate x time
= $80,000 x 12 x 6/12
= $4,800
Amount to be paid on may 1 st the next year (year 2 )=Amount borrowed + interest accrued
= $80,000 + $4,800 = $84,800
Noble must pay South Bank on May 1, Year 2, when the note matures the sum of $84,800
< Back to Assignment Attempts: Average: / 1 2. Introduction to the foreign-currency exchange market In an open economy, why is the supply curve for dollars in the foreign-currency exchange market vertical? Net capital outflow is determined by the real interest rate, not the real exchange rate. Net capital outflow is extremely sensitive to small changes in the real exchange rate. Net capital outflow is determined by real GDP, not the real exchange rate. Net capital outflow equals net exports. Grade It Now Save & Continue Continue without saving
Answer: Net capital outflow is determined by the real interest rate, not the real exchange rate
Explanation:
In the foreign-currency market, the supply of dollars is not dependent on the real exchange rate and so the supply curve will be vertical to indicate this independence by showing inelasticity which means that it is unaffected by the variables in the foreign-currency market.
Supply of dollars is rather dependent on the real interest rate.
This is because dollars get into the world economy (supply of dollars) as a result of investments by Americans into markets abroad in the form of Net Capital Outflow. If American real interest rate is low, Americans will invest in other countries with a higher rate of return thereby pumping more dollars into the world economy.
Rainbow Products is considering the purchase of a paint-making machine to reduce labor costs. The savings are expected to result in additional cash flows to Rainbow of $5000 per year. The machine costs $35,000 and is expected to last for 15 years. Rainbow has determined that the cost of capital for such an investment is 12%.
Instead of the service contract, Rainbow engineers have devised a different option to preserve and actually enhance the capability of the machine over time. By investing 20% of the annual cost savings back into new machine parts, the engineers can increase the cost savings at a 4% annual rate. For example, at the end of year one, 20% of the $5,000 cost savings is reinvested in the machine; the net cash flow is thus $4,000. Next year the cash flow from cost savings grows by 4% to $5,200 gross, or $4,160 net of the 20% investment. As long as the 20% reinvestment continues, the cash flows continue to grow at 4% in perpetuity. What should Rainbow do?
A. What is NPV?
B. What is IRR?
C. What is payback?
Answer:
In finance, the net present value or net present worth applies to a series of cash flows occurring at different times. The present value of a cash flow depends on the interval of time between now and the cash flow. It also depends on the discount rate. NPV accounts for the time value of money.
The internal rate of return is a measure of an investment’s expected future rate of return. As the IRR is an estimate of a future annual rate of return, IRR should not be confused with the actual achieved investment return of an historical investment.
PAYBACK, the largest customer loyalty program lets you earn rewards points on your daily shopping from 100+ online & in-store partners
hope this helps
mark me as brainliesatStock X is selling for $40 a share. An American put option on this stock with a strike price of $48 is trading at $10 per share.
a. the put is in the money
b. the put is out of the money
c. you can make arbitrage profit by buying the put and exercising it immediately
d. a and c
Answer:
a. the put is in the money
Explanation:
Given that
The Selling price of stock x = $40
Strike price = $48
And, the trading per share = $10
Based on the above information
As we know that the put option is the option in which there is a right to sell the particular asset at a particular price on some future date
As we can see that the market price is lower than the strike price so this is the put within the money
Hence, the correct option is a.
Foxx Company incurs $240000 overhead costs each year in its three main departments, setup ($15000), machining ($165000), and packing ($60000). The setup department performs 40 setups per year, the machining department works 5000 hours per year, and the packing department packs 500 orders per year. Information about Foxx’s two products is as follows: Product A1 Product B1 Number of setups 20 20 Machining hours 1000 4000 Orders packed 150 350 Number of products manufactured 600 400 If machining hours are used as a base under traditional casting, how much overhead is assigned to Product A1 each year?
Answer:
Allocated MOH= $48,000
Explanation:
Giving the following information:
Estimated overhead= $240,000
Product A1 Product B1
Machining hours 1000 4000
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 240,000/5,000
Predetermined manufacturing overhead rate= $48 per machine-hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 48*1,000
Allocated MOH= $48,000
g Based on a predicted level of production and sales of 22,000 units, a company anticipates total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this information, the budgeted amount of contribution margin for 20,000 units would be:
Answer:
Total contribution margin= $60,000
Explanation:
First, we need to calculate the actual contribution margin:
Contribution margin= net income + fixed costs
Contribution margin= 36,000 + 30,000= $66,000
Now, the unitary contribution margin:
Unitary contribution margin= 66,000/22,000= $3
Finally, the total contribution margin for 20,000 units:
Total contribution margin= 3*20,000= $60,000
The balance sheet of ABC reports total assets of $1,500,000 and $1,700,000 at the beginning and end of the year, respectively. Net income and sales for the year are $240,000 and $2,000,000, respectively. What is ABC's profit margin (round to nearest whole percentage, just put in the number with no %)?
Answer: 12%
Explanation:
The Net Profit Margin refers to the percentage of Net Income from sales that a company got in the period of record. A higher margin is usually preferred to a lower one.
Profit margin ratio = Net income/ Sales
Profit margin ratio = 240,000 / 2,000,000
Profit margin ratio = 12%
Vicky Robb is considering purchasing the common stock of Hawaii Industries, a rapidly growing boat manufacturer. She finds that the firm’s most recent (2020) annual dividend payment was $2.50 per share. Vicky estimates that these dividends will increase at a 20% annual rate, g1, over the next 3 years (2021, 2022, and 2023) because of the introduction of a hot new boat. At the end of the 3 years (the end of 2023), she expects the firm’s mature product line to result in a slowing of the dividend growth rate to 8% per year, g2, for the foreseeable future. Vicky’s required return, rs, is 15%. Required: What is the current (end-of-2020) value of Hawaii’s common stock, P0 = P2020.
Answer:
P0 = $51.9956 rounded off to $52.00
Explanation:
The two stage growth model of DDM will be used to calculate the price of a stock whose dividends are expected to grow over time with two different growth rates. The DDM values a stock based on the present value of the expected future dividends from the stock.
The formula for price of the stock today under this model is,
P0 = D0 * (1+g1) / (1+r) + D0 * (1+g1)^2 / (1+r)^2 + ... + D0 * (1+g1)^n / (1+r)^n + [ (D0 * (1+g1)^n * (1+g2) / (r - g2)) / (1+r)^n ]
Where,
D0 is the dividend today or most recently paid dividend g1 is the initial growth rate which is 20% g2 is the constant growth rate which is 8% r is the required rate of return
P0 = 2.5 * (1+0.2) / (1+0.15) + 2.5 * (1+0.2)^2 / (1+0.15)^2 +
2.5 * (1+0.2)^3 / (1+0.15)^3 +
[(2.5 * (1+0.2)^3 * (1+0.08) / (0.15 - 0.08) / (1+0.15)^3)
P0 = $51.9956 rounded off to $52.00
Based on the information given, the current value of the stock will be $52.00.
Based on the information given, the following can be denoted.
D0 = dividend today
g1 = initial growth rate = 0%
g2 = constant growth rate = 8%
r = required rate of return
P0 = [2.5 × (1+0.2) / (1+0.15) + 2.5 × (1+0.2)² / (1+0.15)² + 2.5 + (1+0.2)³] / (1+0.15)³ + (2.5 * (1+0.2)³ * (1+0.08) / (0.15 - 0.08) / (1+0.15)³]
P0 = $52.00
In conclusion, the price is $52.
Learn more about stock on:
https://brainly.com/question/25818989
"The current source format of a data file and the desired database file structure are specified to a utility, which then automatically reformats the data and stores it in the database." Which database utility performs the given function?
Answer:
Backup utility of the database
Explanation:
The backup utility of the database performs this function. A copy of data from a database that can be used to remake this data is what is referred to as a backup. It can be logical or physical. Using backup can help in the recovery of files and other documentations. Backup can be done on disk or offline on tape.
Ethics is primarily concerned with what
Answer:
Ethics is based on or primarily concerned with ethical rules. Instead of being based on consequences, these rules are derived from logic, from reasoning, or from the nature of human being as such. ... The purpose of ethics is to develop the individual's moral/ethical character, or virtues.
Explanation:
Ethics is concerned with the moral values and rules.
What is Ethics?Ethics refers to the system of values being imparted by the family and teachers at the school level at the time of the young age. It is concerned what the discipline which decides what is wrong and what is right.
The term ethics is applied to the theory of moral values and principles. The rules are meant to be followed to sustain the life smoothly which is beneficial for the person living in the society.
Ethics is based on or is primarily concerned with ethical norms. In contrast to being based on outcomes, these laws are derived from logic, reasoning, or the character of mankind as a whole.
Therefore, it can be concluded that The moral principles and laws are what ethics is all about.
Learn more about ethics here:
https://brainly.com/question/26273329
#SPJ6
Novak Corporation has the following balances at December 31, 2017. Projected benefit obligation $2,621,000 Plan assets at fair value 2,047,000 Accumulated OCI (PSC) 1,031,000 What is the amount for pension liability that should be reported on Novak's balance sheet at December 31, 2017
Answer:
$574,000
Explanation:
Calculation for the amount for pension liability that should be reported on Novak's balance sheet at December 31, 2017
Using this formula
Pension liability=Projected benefit obligation - Plan assets
Let plug in the formula
Pension liability=$2,621,000-2,047,000
Pension liability=$574,000
Therefore the amount for pension liability that should be reported on Novak's balance sheet at December 31, 2017 will be $574,000
List and explain how the proportional method works when selling common and preferred stocks for one lump sum amount.
Answer and Explanation:
The proportional method is a method of allocating the fair market value of each security from the lump sum sale on the balance sheet based on the ratio of the value of the security to other securities involved in the sale.
It is calculated : fair market value of security/total lump sum sale
The proportional method is one of the methods used when a company sells in lump sum(usually when a business acquires another) as against when a company sells a particular class of stock such as ordinary stock or preferred stock. Using the proportional method, it is assumed that the fair market value of the classes of stock are known and so the company allocates the ratio of different classes involved on the balance sheet based on each class's fair market value. Another method for accounting for this kind of transaction as in allocating classes of stock from lump sale on the balance sheet is the incremental method
Monte Services, Inc. is trying to establish the standard labor cost of a typical brake repair. The following data have been collected from time and motion studies conducted over the past month.
Actual time spent on the brake repairs 1.0 hour
Hourly wage rate $12
Payroll taxes of wage rate 10%
Setup and downtime of actual labor time 20%
Cleanup and rest periods 30%
of actual labor time
Fringe benefits 25%
of wage rate
a. Determine the standard direct labor hours per brake repairs.
(Round answer to 2 decimal places, e.g. 1.25.)
Standard direct labor hours per brake repair_____________
b. Determine the standard direct labor hourly rate. (Round answer to 2 decimal places, e.g. 1.25.)
Standard direct labor hourly rate __________
c. Determine the standard direct labor cost per brake repair. (Round answer to 2 decimal places, e.g. 1.25.)
Answer:
a) standard direct labor hours per brake repair = hour spent repairing the brakes + setup time + cleanup time = 1 + (1 x 20%) + (1 x 30%) = 1.5 hours per brake repair
b) standard direct labor hourly rate = hourly wage rate + payroll taxes + fringe benefits = $12 + ($12 x 10%) + ($12 x 25%) = $16.20
c) standard direct labor cost per brake repair = 1.5 x $16.20 = $24.30