Answers
Answer:
The required rate of return is 12.13%
Explanation:
According to the DDM model, the formula for a price of a stock is
P=D1/R-G
D1= Year end dividend
P= Stock price
R= required rate of return
G= Growth rate of stock
SO we will input the values given to us in the question, in this formula.
145=11.80/(R-0.04)
145R - 5.8=11.80
145R= 17.6
R=17.6/145
R=0.121
R= 12.13%
Related Questions
Parkway Void Co. issued 14-year bonds two years ago at a coupon rate of 10.2 percent. The bonds make semiannual payments. If these bonds currently sell for 96 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
James, Inc., has purchased a brand new machine to produce its High Flight line of shoes. The machine has an economic life of 5 years. The depreciation schedule for the machine is straight-line with no salvage value. The machine costs $540,000. The sales price per pair of shoes is $77, while the variable cost is $29. Fixed costs of $245,000 per year are attributed to the machine. The corporate tax rate is 22 percent and the appropriate discount rate is 9 percent. What is the financial break-even point? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16)
In the case below, the original source material is given along with a sample of student work. Determine the type of plagiarism by clicking the appropriate radio button. Original Source Material Student Version To summarize, the elaboration model of instruction starts by presenting knowledge at a very general or simplified level in the form of a special kind of overview. Then it proceeds to add detail or complexity in "layers" across the entire breadth of the content of the course (or curriculum), one layer at a time, until the desired level of detail or complexity is reached. References: Reigeluth, C. M. (1999). The elaboration theory: Guidance for scope and sequence decisions. In C. M. Reigeluth (Ed.), Instructional design theories and models: A new paradigm of instructional theory (Vol. II, pp. 425-453). Hillsdale, NJ: Lawrence Erlbaum. They soon switched to a model based on the elaboration theory (Reigeluth, 1999). Using this approach, the game would begin with a level that offered the simplest version of the whole task (the epitome); subsequent levels would become increasingly more complex--an approach common to videogames--with opportunities for review and synthesis. References: Reigeluth, C. M. (1999). The elaboration theory: Guidance for scope and sequence decisions. In C. M. Reigeluth (Ed.), Instructional design theories and models: A new paradigm of instructional theory (Vol. II, pp. 425-453). Hillsdale, NJ: Lawrence Erlbaum. Which of the following is true for the Student Version above? a)Word-for-Word plagiarism b)Paraphrasing plagiarism c)This is not plagiarism
The average fixed cost curve a. always declines with increased levels of output. b. always rises with increased levels of output. c. declines as long as it is above marginal cost. d. declines as long as it is below marginal cost.
Answers
Answer:
FV= $34,993.05
Explanation:
Giving the following information:
Annual deposit= $1,475
Number of periods= 15 years
Interest rate= 6.25%
To calculate the future value, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {1,475*[(1.0625^15) - 1]} / 0.0625
FV= $34,993.05
b. How large a gain or loss in aggregate dollar terms do market signaling studies suggest existing FARO shareholders will experience on the announcement date?
c. What percentage of the value of FARO’s existing equity prior to the announcement is this expected gain or loss?
d. At what price should FARO expect its existing shares to sell immediately after the announcement?
Answers
Answer:
a. Market signaling studies suggest that the price of existing FARO shares will fall.
b. $60,000,000
c. 8.403%
d. $38.471
Explanation:
Given
New Shares: $200,000,000
Existing Shares: $17,000,000
Price per Share: 42
a.
Because the stock of the FARO Technologies is overvalued at the current price
b.
Expected Loss: 30% * New Shares Size
New Shares Size = $200,000,000 (given)
Expected Loss = 30% * $200,000,000
Expected Loss = $60,000,000
c.
Percentage of the value of FARO’s existing equity = Ratio of New Expected Share Value to Existing Share Value
Expected Share Value = $60,000,000
Existing Share Value = Price per Shares * Existing Shares
Existing Share Value = 42 * $17,000,000
Existing Share Value = $714,000,000
Percentage of FARO's Existing Equity = $60,000,000 ÷ $714,000,000
Percentage = 8.403%
d.
The price FARO should expect its existing shares to sell
= Price per Share (1 - Percentage of Existing Equity)
Price per Share = 42
Percentage Existing Equity = 8.403%
The price FARO should expect its existing shares to sell = 42(1-8.403%)
The price FARO should expect its existing shares to sell = 42(1-0.08403)
The price FARO should expect its existing shares to sell = 42 * 0.91597
The price FARO should expect its existing shares to sell = $38.47074
The price FARO should expect its existing shares to sell = $38.471 ----- Approximated
Final answer:
The announcement of FARO technologies to sell new shares might decrease their share price as it might signal overvaluation to investors. Existing shareholders may thus experience a loss. The new selling price would be the original price minus the decrease caused by the announcement.
Explanation:
a. The market signaling theory suggests that the announcement of FARO Technologies selling new shares to raise capital could lead to a decrease in the company's share price. This is because it signals to investors that the company may be overvalued, leading them to sell their shares, thereby driving down the price.
b. For existing FARO shareholders, the aggregate dollar loss could be estimated by multiplying the decrease in share price by the number of existing shares.
c. To calculate the percentage of the value of FARO's existing equity that this represents, we could divide the total dollar loss by the company's market capitalization before the announcement, and then multiply by 100 to get a percentage.
d. After the announcement, the price that FARO should expect its shares to sell at would be the original price minus the decrease due to the announcement.
Learn more about Market Signaling here:
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b. Business loans would cost less for the U.S. car manufacturers.
c. It could allow real wages to downwardly adjust more easily.
Answers
Answer: c. It could allow real wages to downwardly adjust more easily.
Explanation:
When there is modest inflation, companies in the car manufacturing industry can simply decide not to increase nominal wages. This would lead to a fall in real wages as inflation would ensure that the nominal wages are less than they were worth before.
This decrease in real wages will allow the companies in the industry to reduce labor costs in real terms and become more competitive with the foreign manufacturers.
Answers
Answer:
The correct answer is $1,370
Explanation:
The computation of net present value is shown below:-
For computing the net present value first we need to find out the present value of inflow
Present Value of Inflow of 3 Years at 9% = Net cash flow × Number of years
= $27,800 × 2.5313
= $70,370
Net Present Value = Present value of inflow - Initial Outflow
= $70,370 - $69,000
= $1,370
Therefore for computing the net present value we simply deduct the initial outflow from present value of inflow.
1. Calculate the standard cost for a pound of Sheffield's double chocolate almond supreme cookies. (Round answer to 2 decimal places, e.g. 3.51.)
Answers
The Standard cost for a pound of Sheffield's double chocolate almond supreme cookies in the above case is $15.10.
What is the standard cost?
A standard cost is defined as an anticipated cost that a company commonly launches at the starting of a fiscal year for amounts used and prices paid.
It is an anticipated amount of money to pay off for materials costs or labor rates. The standardquantity is the anticipated exercise amount of materials or labor.
Computation of standard cost:
According to the given information,
Standard direct materials costs = $0.80 per pound of cookie mix.
Per pound of milk chocolate = $4, and
Per pound of almonds = $19.
Total ounces:
Then, Standard Material Cost:
Now, 1 minute of direct labor is required in the mixing department and 5 minutes of direct labor in the baking department. Then the standard direct labor cost is:
Variable overhead is applied at a rate = $37.00 per direct labor hour
Now, find the value of Standard Variable overhead cost:
Now, Standard Fixed overhead cost:
Therefore, Standard cost for a pound:
Therefore, Standard cost for a pound is $15.10.
To learn more about the standard cost, refer to:
Answer:
The Standard cost for a pound of Sheffield's double chocolate almond supreme cookies is $15.10
Explanation:
The standard direct materials costs are $0.80 per pound of cookie mix, $4 per pound of milk chocolate, and $19 per pound of almonds.
Total ounces = 10 + 5 + 1 = 16
Standard Material Cost = ( × 0.80) + (
× 4) + (
× 19)
Standard Material Cost = $ 2.9375
Each pound of cookies requires 1 minute of direct labor in the mixing department and 5 minutes of direct labor in the baking department.
Standard Direct Labor Cost = × 12.70 +
× 27
Standard Direct Labor Cost = $2.4617
Variable overhead is applied at a rate of $37.00 per direct labor hour
Standard Variable overhead cost = 6/60 × 37
Standard Variable overhead cost = $ 3.70
Standard Fixed overhead cost = 6/60 × 60
Standard Fixed overhead cost = $ 6
Standard cost for a pound = $2.9375 + $2.4617 + $3.70 + $6
Standard cost for a pound = $15.10
b. Cash receipts from sales, $264,000.
c. Budgeted cash disbursements for purchases, $138,000.
d. Budgeted cash disbursements for salaries, $80,000.
e. Other budgeted expenses, $15,000.
f. Cash repayment of bank loan, $10,000.
g. Budgeted depreciation expense, $25,000.
Answers
Answer:
$47,000
Explanation:
The cash budget is a forecast of the company's expected movement in cash considering the expected outflows and inflows. This movements result in a change between the opening and ending cash balance. This may be expressed mathematically as
Opening balance + Cash receipts - Cash disbursed = ending balance
Cash receipts for the period
= $264,000
Cash disbursed
= $138,000 + $80,000 + $10,000 + $15,000
= $243,000
ending balance = $26,000 + $264,000 - $243,000
= $47,000