You consider buying a share of stock. The stock is expected to pay a dividend of $1.50 next year, and dividends are expected to grow by 5% per year forever. What is the stock price now if the stock's beta is 1.1, rf is 6%, and E[rm]

Answers

Answer 1

Answer:

Question

The question is incomplete. The complete question is given as follows:

You consider buying a share of stock. The stock is expected to pay a dividend of $1.50 next year, and dividends are expected to grow by 5% per year forever. What is the stock price now if the stock's beta is 1.1, rf is 6%, and E[rm] = 16%.

Answer

Stock price = $12.5

Explanation:

Using the dividend valuation model, the value of a stock can be determined using this model:

Price = D(1+g)/(r-g)

D- dividend payable now, g- growth rate in dividend, r-return on equity

Return on equity

Re= Rf + β(Rm -Rf)

Rf- risk-free rate, Rm - Return on market portfolio, β- Beta factor

To determine the Stock price we follow the steps below

Step 1

Determine the cost of equity

r = 6% + 1.1 *(16%-6%)

= 17%

Step 2

Determine the stock price

Stock price = 1.50/(0.17-0.05)

= $12.5

Stock price = $12.5

Note

D*(1+g) = Dividend next year. And this has been given as $1.50. So there is no need to apply the growth rate.

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Suppose the reserve requirement (R) is 15%. What is the effect on total checkable deposits in the economy if bank reserves increase by $60 billion. Assume E=0

Answers

Answer:

$400 billion

Explanation:

The computation on the impact on total checkable deposits is shown below

= Increased in the bank reservce ÷ reserve requirement

= $60,000,000,000 ÷ 15%

= $400 billion

Therefore the impact on the total checkable deposits in the case when the bank reserves rises is $400 billion

We simply applied the above formula so that the correct value could come

And, the same is to be considered

For each of the following entities, identify if the entity would be governed by GASB standards by selecting a "G", FASB standards by selecting an "F", or FASAB standards by selecting an "FB". (Hint: Search the website of the entity listed if you are unsure.)1. Your university
2. Department of Defense
3. American Institute of Certified Public Accountants
4. The county in which you live
5. Internal Revenue Service
6. Mayo Clinic
7. New York City
8. American Cancer Society
9. Metropolitan Washington Airports Authority (operates the Washingtorn, DC, airports)
10.The Metropolitan Museum of Art, New York City

Answers

Answer:

1. Your university: F

2. Department of Defense: FB

3. American Institute of Certified Public Accountants: F

4. The county in which you live: G

5. Internal Revenue Service: FB

6. Mayo Clinic: F

7. New York City: G

8. American Cancer Society: F

9. Metropolitan Washington Airports Authority (operates the Washingtorn, DC, airports): G

10.The Metropolitan Museum of Art, New York City: F

Explanation:

GASB is an acronym for Government Accounting Standards Board (GASB) and it's mainly a private, non-governmental organization (NGO) that is saddled with the responsibility of developing and creating reporting standards used in accounting such as the Generally Accepted Accounting Principles (GAAP) for local and state government in the United States of America since 1984.

FASB is an acronym for Financial Accounting Standards Board (FASB) and it's an autonomous non-profit agency which through the use of Generally Accepted Accounting Principles (GAAP), is saddled with the responsibility of establishing and maintaining accounting and financial reporting standards for all firms, business enterprises, and as well as nonprofit organizations doing business in the United States of America. It has its headquarter in Norwalk, Connecticut, United States and was founded in 1973.

FASAB is an acronym for Federal Accounting Standards Board (FASAB) and it's a federal advisory committee which is solely responsible for the development of accounting standards for government agencies in the United States of America. It also is responsible for setting the Generally Accepted Accounting Principles (GAAP).

It has its headquarter in Washington DC and was founded in October 1990.

Final answer:

The universities, counties, cities and similar entities follow GASB standards. Nonprofit organizations like the Mayo Clinic and American Cancer Society adhere to FASB standards. Federal entities like the Department of Defense and Internal Revenue Service follow FASAB standards.

Explanation:

The entities will be governed by the following accounting standards:

Your university would be governed by the GASB (GASB for Governmental Accounting Standards Board).
The Department of Defense would follow the FASB (FASB for Federal Accounting Standards Board).
The American Institute of Certified Public Accountants would follow the FASB (F for Financial Accounting Standards Board).
The county in which you live would be governed by the GASB.
The Internal Revenue Service would adhere to the standards of the FASB.
The Mayo Clinic, as a nonprofit hospital, would follow standards set by the FASB.
New York City would follow the rules of the GASB.
The American Cancer Society as a nonprofit organization would follow the FASB.
The Metropolitan Washington Airports Authority would adhere to the rules of the GASB.
The Metropolitan Museum of Art in New York City, a nonprofit organization, would be governed by FASB standards.

Learn more about Accounting Standards here:

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Jolsan Technologies had received a contract to produce two units of a new cruise missile guidance control. The first unit took 5,000 hours to complete and cost $30,000 in materials and equipment usage. The second took 4,500 hours and cost $24,000 in materials and equipment usage. Labor cost is charged at $20 per hour. The prime contractor has now approached Jolsan Technologies and asked to submit a bid for the cost of producing another 20 guidance controls. Use Exhibit 6.4 and Exhibit 6.5. What will the last unit cost to build

Answers

Answer:

$73,600

Explanation:

A learning curve is a correlation between a learner's performance on a task and the number of attempts or time required to complete the task; this can be represented as a direct proportion on a graph

The last unit will be 22nd unit .

Using learning curve table ,

Time required to build 22nd unit = 3125.49 hours

labour cost to build 22nd unit ( $20 per hour ) = $20 x $3125.49

labour cost to build 22nd unit = $62509.80

Using learning curve table ,

material and equipment cost to build 22nd unit = $11090.67

Therefore,

total cost to build the last unit = Labour cost + Material and equipment cost total cost to build the last unit = $62509.80 + $11090.67

total cost to build the last unit = $73600.47

Learning rate for labour hours ( L1) = Time for 2nd unit / Time for 1st unit

Learning rate for labour hours ( L1) = 4500/5000

Learning rate for labour hours ( L1) = 0.90

Learning rate for material and equipment usage

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Learning rate for material and equipment usage = 24000/30000

Learning rate for material and equipment usage = 0.80 or 80 %

Olive, the owner of Olive’s Orchard, contracts to sell its harvest to Pure Foods, Inc. Later Olive refuses to perform. Pure Foods files a suit to enforce the contract. Olive and Pure Foods are in a state that does not recognize the doctrine of unconscionability. To defend successfully against enforcement of the contract on similar grounds, Olive might rely on traditional notions of a. materiality. b. mistake. c. value. d. fraud.

Answers

Answer:

D)fraud

Explanation:

From the question, we are informed about Olive, the owner of Olive’s Orchard, contracts to sell its harvest to Pure Foods, Inc. Later Olive refuses to perform. Pure Foods files a suit to enforce the contract. Olive and Pure Foods are in a state that does not recognize the doctrine of unconscionability. To defend successfully against enforcement of the contract on similar grounds,. In this case, Olive might rely on traditional notions of a fraud. Fraud can be regarded as an act of deception which is intentional to deprive those that fall for it their legal right. It is activities that gives the perpetrator an unlawful gain or to deny a victim their right. It is carried out by people to get financial or personal gain in an unlawful manner. Some types of fraud that are common are are tax fraud, bankruptcy fraud. as well as credit card fraud,

Which one of the following statements is TRUE?(A) One tool of corporate governance is choosing a good investment banker.
(B) One tool of corporate governance is how the company's charter affects the likelihood of a takeover.
(C) One tool of corporate governance is a company's tax avoidance strategy.
(D) Creditors have a claim on a firm's earning stream through the dividend payments they receive.
(E) One tool of corporate governance is stock repurchases.

Answers

Answer:

Correct Answer is "A"

(A) One tool of corporate governance is choosing a good investment banker.

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Answers

Answer:

Function

Explanation:

Functional departmentalisation is when staff who perform similar functions are put in the same department.

Examples of functional departmentalisation includes- marketing department, production department, finance department, human resources department.

Advantages of functional departmentalisation include:

1. It makes coordination of activities easier

2. It enhances supervision of staff

3. It enhances specialisation.

Functional departmentalisation can lead to overspecialisation and the inability of managers to perform in other departments other than their primary departments.

Other types of departmentalisation are :

1. Customer departmentalisation

2. Geographic departmentalisation

3. Process departmentalisation

4. Product departmentalisation

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