Answer:
The stock's value today is $53.33
Explanation:
The value of a stock can be calculated by determining the present value of associated cash flows
First, we need to calculate the expected dividend each year
Year ______ Dividend
1__________$1.30 x ( 1 + 40% ) = $1.8200
2__________$1.82 x ( 1 + 40% ) = $2.5480
3__________$2.548 x ( 1 + 40% ) = $3.5672
4__________$3.5672 x ( 1 + 7% ) = $3.8169
Now calculate the present value of the dividends
Year ______ Present value
1__________$1.8200 x ( 1 + 12.7% )^-1 = $2.0511
2__________$2.5480 x ( 1 + 12.7% )^-2 = $2.0061
3__________$3.5672 x ( 1 + 12.7% )^-3 = $2.4920
4__________[ $3.8169 / ( 12.7% - 7% ) ] x ( 1 + 12.7% )^-3 = $46.7804
Hence,
Value of Stock = $2.0511 + $2.0061 + $2.4920 + $46.7804 = $53.3296 = $53.33
Holiday Trees Inc. is an unlevered (all-equity) firm that expects to generate an after-tax cash flow stream of $250 million next year and is expected to grow at a rate of 4% per year. The beta of the unlevered value of this free cash flow stream is 1.5. The riskless rate of interest is 6%, and the risk premium on the market portfolio is 7%. The corporate tax rate is 40%. Assume all debt is riskless. 1. What is the value of unlevered firm?2. The firm decides to lever itself to a 50% debt-to-equity ratio. Calculate WACC.3. Calculate value of the levered firm.
Answer and Explanation:
The computation is shown below:
1. Cost of equity = Risk free Rate + Beta × Market Risk Premium
= 6% + 1.5 × 7%
= 16.5%
Now Value of un Levered firm is
= After tax Cash flow year1 ÷ (Cost of Equity - Growth)
= $250 ÷ (16.5% - 4%)
= $2000
Beta levered is
= Beta Unlevered (1+ (1- Tax Rate ) × Debt ÷ Equity)
= 1.5 × (1 + (1 -40%) × 50% ÷ 100%
= 1.95
2. Cost of equity = Risk free Rate + Beta × Market Risk Premium
= 6% + 1.95 × 7%
= 19.65%
Now WACC = Weight of Equity × Cost of Equity + Weight of debt × Cost of Debt × (1 - Tax rate)
=100% ÷ 150% × 19.65% + 50% ÷ 150% × 6% × (1 - 40%)
= 14.30%
3. Debt = 1 ÷ 3 × 2000
Value of levered firm = Value Unlevered + Debt × Tax Rate
= 2000 + 2000 ÷ 3 × 40%
= $2,266.67
On September 1, 2015, Vernon Corporation acquired Barlow Enterprises for a cash payment of $850,000. At the time of purchases, Barlow's balance sheet showed assets of $620,000, liabilities of $240,000, and owner's equity of $420,000. The fair value of Barlow's assets is estimated to be $970,000. Compute the amount of goodwill acquired by Vernon.
Answer:
goodwill = $120,000
Explanation:
the basic formula used to calculate the goodwill of an acquisition is:
goodwill = total consideration paid - fair value of net assets
total consideration paid = $850,000fair value of net assets = fair value of assets - fair value of liabilities = $970,000 - $240,000 = $730,000goodwill = $850,000 - $730,000 = $120,000
How does income get taxed twice in the case of a corporation?
Answer: Double taxation occurs when a corporation pays the corporate tax rate on earnings or profits, then pays dividends from those profits to shareholders who are again taxed on the money at their personal rates.
Explanation:
Suppose the Federal Reserve increases the amount of reserves by $100 million and the total money supply increases by $500 million. Instructions: Enter your answers as a whole number. a. What is the money multiplier
Answer:
the money multiplier is 5
Explanation:
The computation of the money multiplier is as follows:
As we know that
Increase in money supply = Increase in reserves × Money multiplier
Now after rearranged it the following formula is
Money multiplier = Increase in money supply ÷ Increase in reserves
= $500 million ÷ $100 million
= 5
Hence, the money multiplier is 5
A company has decided to discontinue a component of its business but, when the reporting period ends, the component has not yet been sold. The amount that the company would report as income from discontinued operations is (ignore tax effects): Multiple Choice income from operations for the year and the amount by which the component’s fair value less cost to sell is greater than book value. income from operations for the year and the amount by which the component’s fair value less cost to sell is less than book value. only the amount by which the component’s fair value less cost to sell is less than book value. only the component’s income from operations for the year.
Answer: income from operations for the year and the amount by which the component’s fair value less cost to sell is less than book value
Explanation:
Discontinued operations is simply and accounting term which means the parts of the core business of a company that have either been shut down or divested.
With regards to the question, the amount that the company would report as income from discontinued operations would be the income or loss that was gotten from operations, that is revenues, the expenses, gains and the losses and the impairment loss.
Therefore, the correct answer will be option B "Income from operations for the year and the amount by which the components fair value less cost to sell is less than the book value".
A company's fixed interest expense is $26,000, its income before interest expense and income taxes is $221,000. Its net income is $106,100. The company's times interest earned ratio equals:
Answer:
8.5
Explanation:
The company interest expense is $26,000
The income tax is $221,000
The net income is $106,100
Therefore the company times interest earned ratio can be calculated as follows
= Income tax/interest expense
= 221,000/ 26,000
= 8.5
Hence the company times interest earned ratio is 8.5
Only ______ segregation produces viable gametes and progeny, which also occurs in about half of meiosis and accounts for semi-sterility of translocation heterozygotes.
a. Alternate
b. Adjacent-1
c. Adjacent-2
d. Both B & C
Answer:
a. Alternate
Explanation:
Translocation is the process whereby two non-homologous chromosomes undergo mutation by exchanging their parts. This establishes new linkages in the chromosomes. Translocations occur during anaphase I of meiosis. There are two common types of segregations that occur during translocations; Adjacent-1 and Alternate segregations which both have equal chances of occurrence. A less common third one is Adjacent-2 segregation.
Adjacent-1 and Adjacent-2 segregation produces genetically incomplete gametes, therefore, the gametes are non-viable or sterile.
Alternate segregation on the other hand result in the formation of genetically complete gametes, therefore, the gametes produced are viable.
Only alternate segregation produces viable gametes and progeny, which also occurs in about half of meiosis and accounts for semi-sterility of translocation heterozygotes.
A generous benefactor to a local symphony plans to make a one-time endowment that would provide the ballet with $150,000 per year into perpetuity. The rate of interest is expected to be 6 percent for all future time periods. How large must the endowment be?
Answer:
The right answer is "$2,500,000".
Explanation:
The given values are:
Interest rate,
= 6%
i.e.,
= 0.06
Perpetuity per year
= $150,000
Now,
The present value will be:
= [tex]\frac{Perpetuity}{Interest \ rate}[/tex]
On substituting the estimated values, we get
= [tex]\frac{ 150,000}{0.06}[/tex]
= [tex]2,5 00,00 0[/tex] ($)
ABC company has two classes of stock: A preferred that has a market value of $125 per share and a par value of $100, with a 6% cumulative dividend, 10000 shares issued and outstanding. A common stock that was issued at $20 per share, no par value, 50000 shares issued and outstanding. ABC paid cash dividends of $75000 in 2007, $50,000 in 2008, and $80,000 in 2009. For 2007 indicate how much of the dividend the Preferred shareholders and common shareholders received. In 2007
Answer:
Dividends paid to preferred shareholders in 2007 = $60,000
Dividends paid to common shareholders in 2007 = $15,000
Explanation:
The Dividends paid to preferred shareholders in 2007 = 6% * $100 * 10,000 shares
The Dividends paid to preferred shareholders in 2007 = 0.06*100*10,000
The Dividends paid to preferred shareholders in 2007 = $60,000
Dividends paid to common shareholders in 2007 = Cash dividend paid in 2007 - Dividends paid to preferred shareholders
Dividends paid to common shareholders in 2007 = $75,000 - $60,000
Dividends paid to common shareholders in 2007 = $15,000
If a check correctly written and paid by the bank for $236 is incorrectly recorded in the company's books for $263, how should this error be treated on the bank reconciliation
Answer: Difference is added to book balance
Explanation:
The error overstated the amount of money that the business paid by check which means that it understated the bank balance of the company.
The difference between the amounts should therefore be added to the book balance to reconcile it to the bank balance;
= 263 - 236
= $27
$27 will be added to the book balance.
Assuming that liquidity and interest rate expectations are both important for explaining the shape of a yield curve, what does a flat yield curve indicate about the market’s perception of future interest rates?
Answer:
A flat yield curve indicates that there is perception that there will be little difference in the future short term interest rate and long term interest rate.
Explanation:
Yield curves are used to illustrate yield of a bond over a period of time. It is illustrated graphically in the attached.
It gives an idea of variations in short term and long term rates in the future.
A rising yield curve indicates that investors will get higher yield as time goes on.
However when the grid curve is flattening it means there is no foreseeable increase in yield in the future.
Flattening of yield curve occurs when there is anticipation of slow economic growth.
A flat yield curve indicates that the market believes that there will be little to no change in interest rates in the long run/ future.
The yield curve shows the different interest rates across different time periods by starting from the short term to the long term.
If this curve is flat, it means that long term/ future rates will be the same as short term/ current interest rates which also means that liquidity is expected to remain the same.
In conclusion, this indicates that future rates will be the same as the current.
Find out more about the yield curve at https://brainly.com/question/14564717.
The executor of Danny Mack's estate has listed the following properties at fair value: Cash $200,000, Life Insurance Receivable $500,000, Investment in Stocks and Bonds $50,000, Rental Property $100,000, and Personal Property $80,000. Additionally, the executor found $100,000 of various debts incurred before the decedent's death. The cost of Danny Mack's funeral was $20,000.Prepare a Charge and Discharge Statement for the estate.
Answer:
Charge & Discharge statement
Particulars Amount
Cash $200,000
Life insurance receivable $500,000
Investment in stock & bonds $50,000
Rental property $100,000
Personal property $80,000
Balance before discharge $930,000
Less: Discharge
Debts $100,000
cost of funeral $20,000 $120,000
Leaving a principal balance $810,000
Minor Electric has received a special one-time order for 800 light fixtures (units) at $10 per unit. Minor currently produces and sells 9,000 units at $13.00 each. This level represents 90% of its capacity. Production costs for these units are $8.00 per unit, which includes $6.50 variable cost and $1.50 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $800 with a zero salvage value. Management expects no other changes in costs as a result of the additional production. Should the company accept the special order
Answer and Explanation:
The computation is shown below;
But before that the net income from special order is
Sales value (800 × $10) $8,000
Less: variable cost (800 × $6.5) -$5,200
Less: fixed cost $800
Net income $2,000
As the net income comes in positive that means the company should accept the special order as the net income would increased by $2,000
A mini-presentation Please make a presentation about the topic "What is important when working from home?" • Set up an office space in the house. • Plan your working hours and your breaks. • • You are require to submit your presentation script and your video here.
Explanation:
Working from home can be a challenging but very rewarding task. When thinking about the advantages of being able to work from home, you can assess the flexibility of being in an environment where you can feel more secure and comfortable, in addition to the possibility of adapting your schedules and goals, which guarantees greater autonomy and productivity.
However, on the other hand, the advantages explained here can give rise to an important challenge that interferes with the worker's performance, since self-management is something that can be difficult if there is no organization.
Being at home can confer external interference, even more if the individual lives with more people, so it is ideal to set up an office at home where there is silence and ideal conditions for the execution of tasks. It is also necessary that the schedules are adhered to and that there are no distractions with cell phones, television or any other form of incentive that blur the worker, it is ideal that there is an ideal stipulation of working hours and breaks, so that the flexibility is adequate and ideal for the employee. performance and productivity of each person according to their professional profile. But basically, organization, control, discipline and monitoring are necessary, so that there is efficiency and effectiveness in working at home.
Write an equation to solve and find the answer to the following rate problem. Show all of your work. A gardening store sells 6 plants per hour. How many plants they will sell in 5 hours?
Answer:
30 plants
Explanation:
The store sells six plants per hour; in 5 hours, the store will sell
i.e., 1 hr = 6 plants,
if 5 hr = 6 plants x 5
=30 plants
Answer:
21
Explanation:
What is the difference between holistic case study and embedded case study, provide a simple example?
Answer:
A holistic case is one where the case is the unit of analysis; an embedded one is where there are several units of analysis in the case. For example, a case could be about a school and its response to a new demographic trend or government edict, in which case it would be holistic.
Explanation:
I looked it up lol
The increase in unemployment that occurs during recessions and depressions is called Group of answer choices normal unemployment. cyclical unemployment. frictional unemployment. structural unemployment.
Answer:
cyclical unemployment.
Explanation:
Unemployment rate refers to the percentage of the total labor force in an economy, who are unemployed but seeking to be gainfully employed. The unemployment rate is divided into various types, these include;
I. Cyclical unemployment rate (CU).
II. Frictional unemployment rate (FU).
III. Structural unemployment rate (SU).
IV. Actual unemployment rate (AU).
V. Natural Rate of Unemployment (NU).
A cyclical unemployment can be defined as a type of unemployment which is typically related to changes in the business, economy or industry cycle such as recession, governmental policies etc.
Mathematically, cyclical unemployment rate can be calculated using the formula;
[tex]Cyclical \; unemployment \; rate \; (CU) = Actual \; unemployment \; rate \; (AU) - Natural \;unemployment \; rate \; (NU)[/tex]
Hence, the increase in unemployment that occurs during recessions and depressions is called cyclical unemployment
**ECONOMICS** Which action would most likely limit a person's success in the workplace?
A. Coming into the office on time every day of the year
B. Following workplace rules even when they're inconvenient
C. Needing to work as part of a team to complete a large task
D. Refusing to let others know about problems with a project
Answer:
Also, refusing to let fellow team members help on a project
Explanation:
kinda the same as the other answer but the wording is a little different.
The actions that would most likely limit a person's success in the workplace include refusing to let others know about the problems with the project Hence option D is correct.
What is the workplace?A workplace is a place where an employee or someone works and is thus a place of employment the place may include offices, buildings, and many more.
The workplace needs to have cooperation and collaboration from the people of all types of backgrounds in order to make the project or the company a success.
Find out more information about the workplace
brainly.com/question/26463698
As an important control for the occurrence assertion related to sales, the computer starts with the population of daily sales invoices and develops a one for one match with underlying shipping documents to ensure that each sales invoice is supported by a ________.
Answer:
A. bill of lading
Explanation:
The bill of lading is the document that supports the sales invoice as the bil of lading contains the details regarding the shipment and the confirmation with respect to the delivery
So as per the given situation since it is mentioned in the question that for shipping documents the sales invoice should be supported by the bill of lading
hence, the same is to be considered
For the current year ($ in millions), Central Park Corp. had $80 in pretax accounting income. This included bad debt expense of $6 based on the allowance method, and $20 in depreciation expense. Two million in receivables were written off as uncollectible, and MACRS depreciation amounted to $35. In the absence of other temporary or permanent differences, what was Central Park's taxable income
Answer:
$69
Explanation:
Calculation for Central Park's taxable income
Pretax accounting income $80
Less Temporary differenceDepreciation (15)
($35 – $20)
Bad debt expense $4
($6 – $2)
Taxable income$69
($80-$15+$4)
Therefore Central Park's taxable income will be $69
15% of all cars passing along a certain road are blue. What is the probability that the 7th car will be the first blue car that you see passing along the road?
The probability is (85/100)⁶ * (15/100) = 5.657%.
Answer:
5.657%
Explanation:
ABC manufacturing company produces a television table that sells for $10 per unit. It has variable costs of $5 per unit and incurs fixed costs of $20000 per period. Find break-even point in units.
Answer:
i think it's 4000 units
Marquis Company uses a weighted-average perpetual inventory system and has the following purchases and sales: August 211 units were purchased at $2 per unit. August 1816 units were purchased at $4 per unit. August 2913 units were sold. What is the amount of the cost of goods sold for this sale
Answer:
$41.41
Explanation:
The Weighted Average Cost Method recalculates the unit cost after every new purchase. The goods are then sold at the recent calculated average cost before the sale.
Average Cost Before sale = Total Cost ÷ Units Available for sale
= ( 11 units × $2 + 16 units × $4) ÷ ( 11 units + 16 units)
= $3.185
Therefore,
Cost of Goods Sold = Units Sold × Average Unit Cost Before sale
= 13 units × $3.185
= $41.41
Conclusion :
The amount of the cost of goods sold for this sale is $41.41.
QUESTION 1 of 10: You are considering leasing a store site that has 1,200 square feet. The landlord is asking for a rent of $65 per square
foot per year. How much is the rent per month?
a) $6,000
b) $6.250
c) $6,500
d) $6,750
Submit
Answer:
c) $6,500
Explanation:
The rent per year = $65 per foot
Total square feet = 1200
Rent per year = $65 x 1200
=$78,000
Rent per months will be $78,000 /12
=$6,500
We have acquired new furniture for the office. The invoice for $6,000 offers two ways to pay: we can pay the entire amount by September 1, or we can pay $3,060 by September 1 and $3,000 by January 1. How does our decision depend on the interest rate at which we can invest our funds
Answer:
6.12%
Explanation:
Calculation for How does our decision depend on the interest rate at which we can invest our funds
Present value = 6000-3060
Present value = 2940
Future value = Present value+Present Value*Numver of month* Rate of interest/ 100
3000 = 2940+2940*4/12*R/100
60 = 2940*4/12*R/100
60*12/4 = 2940*R/100
180 = 2940*R/100
180/2940 = R/100
0.061224 = R/100
Rate = 6.1224
Therefore How does our decision depend on the interest rate at which we can invest our funds is 6.1224
Effective capital budgeting for general capital assets of a government requires: Intermediate and long-range capital improvement plans for general capital assets. Nonfinancial information on physical measures and service condition of capital assets of component units. Consideration of how proprietary fund capital projects will be financed. Information about the capital asset needs of a motor pool accounted for as an internal service fund.
Answer:
intermediate and long-range capital improvement plans for general capital assets
Explanation:
Capital budgeting in domain of finance
can be regarded as ways whereby the Value of potential investment project is been analysed and determined.The net present value can be known by finding the difference that exist between the cash flow present value and the present value of cash inflow. It should be noted that Effective capital budgeting for general capital assets of a government requires intermediate and long-range capital improvement plans for general capital assets
A startup will start paying dividends at the end of year 6. The initial growth rate is 10%. This growth rate will continue until year 10. Starting from year 11, the growth rate drops to 5%. The discount rate is 20%. What should the price be at the end of year 5 if the initial dividend is $10.
Answer: $76.46
Explanation:
The price at the end of year 5 is the sum of the present values of the dividends from year 6 to 10 and the present value of the terminal in year 10.
Year Dividends Discount factor Present value
6 10 ( 1 + 20%) 8.33
7 10 * 1.1 = 11 (1 + 20%)² 7.64
8 10 * 1.1² = 12.1 (1 + 20%)³ 7.00
9 10 * 1.1³ = 13.31 (1 + 20%)⁴ 6.42
10 10 * 1.1⁴ = 14.641 (1 + 20%)⁵ 5.88
Total 35.27
Terminal value at year 10 = Next dividend / (Discount rate - growth)
= (14.641 * 1.05) / (20% - 5%)
= $102.487
Present value = 102.487/ (1 + 20%)⁵ = $41.187
Price of stock = 41.187 + 35.27
= $76.46
a) Consumers spend $1200 buying plastic bags, $500 buying bread, and $80 on imported peanut butter. b) The Government spends $300 buying bread and $90 buying imported peanut butter. c) The bread company buys $100 of flour from a flour company and uses it entirely to make bread which they sell all of it to domestic consumers. The bread company buys $500 of new bread machines from a domestic machine company. d) The wheat company exports $180 of wheat. Question: Calculate the GDP of Stonyland in 2019. Enter only numbers. Do not enter letters or symbols. Year Pв QB Ps Qs 2015 $2.00 15 $3.50 10 2016 $2.50 20 $4.00 12 Refer to the table above. Suppose the country of Berryland only produces blueberries and strawberries, purchased by domestic consumers. We have the following data about the price and quantity produced of blueberries (PB, QB) and strawberries (PS, QS). Base year is 2015. Question: Calculate the real GDP growth rate in percentage between 2015 and 2016. Round up to two decimal places. Do not enter letters or symbols. If the nominal interest rate is 10 percent and the inflation rate is 4 percent, then what is the real interest rate? Enter numbers only. Do not enter letters or symbols.
Answer:
The Real GDP Growth Rate = 26.15%
Real Interest Rate = 6%
Explanation:
GDP = Consumption Expenditure + Government Purchases + Investment Expenditure + Net exports ( Exports - Imports)
Consumption Expenditure = Plastic bags + Bread
Consumption Expenditure = $1200 + $500
Consumption Expenditure = $1700
Government Spending = Bread = $300
Investment Expenditure = Final Bread made by bread company + Machines Purchased
Investment Expenditure = $100 + $500
Investment Expenditure = $600
Exports = Wheat Exported = $180
Imports = Imported Peanut Butter by Consumer + Imported Peanut Butter by Government
Imports = $80 + $90
Imports = $170
Net Exports = Exports - Imports
Net Exports = $180 - $170
Net Exports = $10
Total GDP = 1700 + 300 + 600 + 10
Total GDP = $2610
Nominal GDP in 2015 = Price * Quantity
Nominal GDP in 2015 = $2 * 15 + $3.50 * 10
Nominal GDP in 2015 = $30 + $35
Nominal GDP in 2015 = $65
Nominal GDP 2016 = $2.50 * 20 + $4 * 12
Nominal GDP 2016 = $50 + $48
Nominal GDP 2016 = $98
Real GDP 2015 = Nominal GDP 2015 = $65 . This is because 2015 is base year.
Real GDP 2016 = $2 * 20 + $3.50 * 12
Real GDP 2016 = $40 + $42
Real GDP 2016 = $82
The Real GDP Growth Rate = (Real GDP 2016 - Real GDP 2015) / Real GDP 2015 * 100
The Real GDP Growth Rate = (82 - 65) / 65 * 100
The Real GDP Growth Rate = 17/65 * 100
The Real GDP Growth Rate = 0.2615385 * 100
The Real GDP Growth Rate = 26.15%
b. Nominal interest Rate = 10%
Inflation Rate = 4%
Real Interest Rate = Nominal Interest Rate - Inflation Rate
Real Interest Rate = 10% - 4%
Real Interest Rate = 6%
Abburi Company's manufacturing overhead is 30% of its total conversion costs. If direct labor is $105,700 and if direct materials are $24,400, the manufacturing overhead is:
Answer:
45,300
Explanation:
The manufacturing overhead is 30%
Direct labour is $105,700
Direct material is $24,400
Therefore the manufacturing overhead can be calculated as follows
The first step is to find the conversion costs
1 -30/100CC= 105,700
1-0.3CC= 105,700
0.7CC= 105,700
CC= 105,700/0.7
CC= 151,000
= 151,000-105,700
= 45,300
Hence the manufacturing overhead is 45,300
Forest Gump drinks Dr. Pepper. He can buy as many cans of Dr. Pepper as he wishes at a price of $0.50 per can. On a particular day, he is willing to pay $1.00 for the first can, $0.75 for the second can, $0.60 for the third can, and $0.40 for the fourth can. Assume Forest Gump is rational in deciding how many cans to buy. His consumer surplus is
Answer:
0.85
Explanation:
1-0.50 = 0.50
0.75-0.50 = 0.25
0.60-0.50 = 0.10
0.50+0.25+0.10
= 0.85