BUSINESS COLLEGE

Hubbard Industries just paid a common dividend, D0, of $2.00. It expects to grow at a constant rate of 3% per year. If investors require a 8% return on equity, what is the current price of Hubbard's common stock

Answers

Answer 1

Answer:

The answer is $41.2

Explanation:

This will be solved by Dividend Discount Model which is one of the ways of valuing the price of shareholders' equity.

Here, the future value of dividend payment are discounted using the cost of equity.

Ke = D1/Po + g

Where Ke is the cost of equity

D1 is future dividend payment.

Po is the current share price or stock price

g is the growth rate.

To find the current price of stock price, we need to re write the equation;

Po = D1 ÷ (Ke - g)

D1 = Do x 1.03

= $2 x 1.03

=2.06

Ke = 8% or 0.08

g = 3% or 0.03

So we have;

2.06 ÷ (0.08 -0.03)

$2.06 ÷ 0.05

$41.2

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Which of the following accurately describe depreciable cost? i. The amount of cost a company intends to depreciate over the life of the asset? ii. The acquisition cost of the asset. iii. The fair market value of the asset iv. The acquisition cost of the asset less the salvage value.

Answers

Answer:

(i) and (iv)

Explanation:

The appreciable cost is the cost in which the assets can be depreciation over the useful life

And, the appreciable cost is come after deducting the salvage value from the acquisition cost

The formula to compute the depreciation expense using the straight-line method is shown below:

= (Original cost - salvage value) ÷ (useful life)

So it can be calculated after considering the first and four options

6. A system anticipates that spending $300,000 on an advertising campaign will increase bed days by 650. The marketing department anticipates that each additional bed day will yield $2,100 in additional revenue and will increase costs by $1,700. The campaign a. will reduce profits by $40,000. b. will increase profits by $40,000. c. will increase profits by $90,000. d. will increase profits by $210,000

Answers

Answer:

a. will reduce profits by $40,000

Explanation:

A: TR - TC = 650 * 2,100 - [$300,000 + (650 * 1,700)]1,365,000 - 1,405,000 = $ - 40,000

Therefore, this campaign will reduce profits by $40,000

Final answer:

The advertising campaign would reduce profits by $40,000. This is calculated by subtracting the campaign cost and additional costs per bed day from the total revenue generated from bed days.

Explanation:

The subject of this question is the financial impact of a proposed advertising campaign on a system's profits. To determine the effect on profits, we need to calculate the difference between the anticipated additional revenue and the anticipated increased costs, and then subtract the cost of the advertising campaign.

In this scenario, the total additional revenue from 650 bed days, at $2,100 each, would be $2,100 x 650 = $1,365,000. The total additional costs from these bed days would be $1,700 x 650 = $1,105,000. Subtracting costs from revenue, we have $1,365,000 - $1,105,000 = $260,000. Finally, we subtract the cost of the campaign, $260,000 - $300,000 = -$40,000. So, the advertising campaign would reduce profits by $40,000. Therefore, the correct choice is (a).

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The following data relate to direct materials costs for February: Materials cost per yard: standard, $1.97; actual, $2.05 Yards per unit: standard, 4.67 yards; actual, 5.08 yards Units of production: 9,300 The direct materials quantity variance is a.$7,816.65 favorable b.$7,511.61 favorable c.$7,816.65 unfavorable d.$7,511.61 unfavorable

Answers

Answer:

correct option is d.$7,511.61 unfavorable

Explanation:

given data

standard material cost = $1.97 per yard

Actual material cost = $2.05 per yard

Standard yards = 4.67 per unit

Actual yards = 5.08 per unit

Units of production = 9300

solution

we get here Direct material quantity variance that is express as

Direct material quantity variance = (Standard quantity - actual quantity) × Standard rate .....................1

put here value and we will get

Direct material quantity variance = (9300 × 4.67 - 9300 × 5.08) × 1.97

Direct material quantity variance = −7511.61

so correct option is d.$7,511.61 unfavorable

EB17. LO 7.5The production cost for UV protective sunglasses is $5.50 per unit and fixed costs are $19,400 per month. How much is the favorable or unfavorable variance if 14,000 units were produced for a total of $97,000?

Answers

Answer:

$600 unfavorable

Explanation:

The budgeted cost of producing 14,000 units at $5.50 per unit and with fixed costs of $19,400 is:

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The variance is given by subtracting the budgeted cost by the actual cost ($97,000):

$V= \$96,400 - \$97,000\nV= -\$600$

Since the variance is negative, the variance is unfavorable

Miguel works for an organization that collects books from donors and redistributes the books to schools to promote literacy and good reading habits. The company is funded by a government grant. Miguel works for a(n) ________.

Answers

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Rice Dazzle Inc. has been making the same breakfast cereal for 50 years. Recently, sales have plummeted. To counteract this, the company created a new package that included an endorsement by a celebrity. As a result, sales increased close to previous highs. However, the cereal itself remained the same. According to the VRIO framework, is the new packaging a valuable resource for Rice Dazzle?

Answers

Answer:

Explanation:

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