Answer:
13.05%
Explanation:
Using CAPM Equation, Ke = Rf+Beta*(Rm-Rf)
= 0.045+1.3*(0.07)
= 0.136
= 13.60%
Using Dividend growth model, Ke = (D1/P0) + g
= (D0*(1+g)/P0) = g
= (1.50*(1+0.08)/36) + 0.08
= 0.125
= 12.50
The cost of equity (Ke) = 0.136 + 0.125 / 2
The cost of equity (Ke) = 0.261/2
The cost of equity (Ke) = 0.1305
The cost of equity (Ke) = 13.05%
Chester's Balance Sheet has $57,976,422 in equity. Further, the company is expecting $3,000,000 in net income next year. Assuming no dividends are paid and no stock is issued, what would their Book Value be next year
Answer:
Chester's Book Value would be $60,976,422 next year.
Explanation:
a) Data and Calculations:
Equity = $57,976,422
Expected net income = $3,000,000
If no dividends are paid and no stock is issued, the expected net income will be equal to the Retained Earnings for the next period.
Therefore, the book value or equity value of Chester's balance sheet for the next year will be the addition of the net income of $3,000,000 to the equity balance of $57,976,422.
This will total $60,976,422 ($57,976,422 + $3,000,000).
b) Chester's book value is the net asset value and can be calculated as total assets minus liabilities.
Reginald owns a grocery and his clerks are on strike. Reginald is trying to operate the store with the help of his manager, but ten of the striking clerks are crowding near the store entrance with large picket signs. If Reginald asks you what can be done, your best answer would be for Reginald to:_______
a. seek a rescission that will return the clerks to their status quo.
b. merge law and equity.
c. seek a decree of specific performance.
d. seek an injunction.
e. hire Norris, Stallone and Segal
Answer:
merge law and equity
Explanation:
In resolving labour related or welfare issues the best way to do so will be to hear the grievances of the striking workers and try to find an equitable solution to the situation.
However if all reasonable avenues have been pursued and they still don't want to comply, then legal measures can be taken to make them work.
In this scenario Reginald should call the striking workers and try to come to an equitable solution for the business and workers where there will be a win-win.
If this does not work he can use the law to compel them to comply.
Company BFM has several bond issues outstanding, each making semiannual interest payments. The bonds are listed below. If the corporate tax rate is 15%, what is the aftertax cost of debt?
Bond Coupon Rate Price Quote Maturity Face Value
1 7.5% 105.0 5 years $20,000,000
2 5.8 95.4 8 years 40,000,000
3 7.7 103.8 15 1/2 years 45,000,000
4 8.1 105.7 25 years 60,000,000
Answer:
bond 1:
YTM = {coupon + [(face value - market value) / n]} / [(face value + market value) / 2]
YTM = {750,000 + [(20,000,000 - 21,000,000) / 10]} / [(20,000,000 + 21,000,000) / 2]
YTM = 650,000 / 20,500,000 = 3.17 x 2 = 6.34%
after tax cost of debt = 6.34% x (1 - 15%) = 5.39%
bond 2:
YTM = {coupon + [(face value - market value) / n]} / [(face value + market value) / 2]
YTM = {1,160,000 + [(40,000,000 - 38,160,000) / 16]} / [(40,000,000 + 38,160,000) / 2]
YTM = 1,275,000 / 39,080,000 = 3.26 x 2 = 6.53%
after tax cost of debt = 6.53% x (1 - 15%) = 5.55%
bond 3:
YTM = {coupon + [(face value - market value) / n]} / [(face value + market value) / 2]
YTM = {1,732,500 + [(45,000,000 - 46,710,000) / 31]} / [(45,000,000 + 46,710,000) / 2]
YTM = 1,677,339 / 45,855,000 = 3.66 x 2 = 7.32%
after tax cost of debt = 7.32% x (1 - 15%) = 6.22%
bond 4:
YTM = {coupon + [(face value - market value) / n]} / [(face value + market value) / 2]
YTM = {2,430,000 + [(60,000,000 - 63,420,000) / 50]} / [(60,000,000 + 63,420,000) / 2]
YTM = 2,361,600 / 61,710,000 = 3.83 x 2 = 7.65%
after tax cost of debt = 7.65% x (1 - 15%) = 6.51%
Whistle Stop pays a constant annual dividend of $4 on its stock. The company will maintain this dividend for the next 3 years and will then cease paying dividends forever. What is the current price per share if the required return on this stock is 15.6 percent?
a. $10.38
b. $9.52
c. $9.04
d. $9.28
e. $10.02
Answer:
P0 = $9.04279 rounded off to $9.04
Option c is the correct answer
Explanation:
Using the the dividend discount model, we calculate the price of the stock today. It values the stock based on the present value of the expected future dividends from the stock. To calculate the price of the stock today, we will use the following formula,
P0 = D1 / (1+r) + D2 / (1+r)^2 + D3 / (1+r)^3
Where,
r is the required rate of returnP0 = 4 / (1+0.156) + 4 / (1+0.156)^2 + 4 / (1+0.156)^3
P0 = $9.04279 rounded off to $9.04
William's accountant made an error, and the budget has been reduced from $3000 to $2500. William's profit will go down by:________
a. $625
b. $1350
c. $1650
d. $0
Lux Company uses a periodic inventory system. The company started the month with 20 lamps in its beginning inventory that cost $30 each. During the month, Lux purchased 80 additional lamps for $31 each. At the end of the month, Lux counted its inventory and found that 25 lamps remained unsold. If Lux uses the weighted average cost method, its cost of goods sold for the month is:________
Answer:
cost of goods sold = $2,310
Explanation:
beginning inventory 20 units at $30 each = $600
purchases during the month = 80 units at $31 each = $2,480
ending inventory = 25 units
using the weighted average cost method, each unit will be valued at ($600 + $2,480) / (20 + 80) = $3,080 / 100 units = $30.80
ending inventory = 25 units x $30.80 = $770
cost of goods sold = (100 - 25) x $30.80 = $2,310
On February 22, Brett Corporation acquired 210 shares of its $3 par value common stock for $25 each. On March 15, the company resold 62 shares for $28 each. What is true of the entry for reselling the shares
Answer:
Credit Additional Paid in Capital $186
Explanation:
Preparation of the true of the Journal entry for reselling the shares
Dr Cash 1,736
(62 x $28)
Cr Treasury Stock 1,550
(62x $25)
Cr Additional Paid-in Capital 186
(62 x $3)
Therefore the journal entry to reissue the shares for Brett Corporation On February 22 would be:
Credit Additional Paid in Capital $186
The company you work for has decided to double stock their 1200 head WF curtain-sided barns. What changes/adjustments would you make to the ventilation controller settings to accommodate the extra pigs? What possible deficiencies could be created by double stocking?
Answer:
Changes to make in ventilation controller settings to accomodate the extra pigs
More width area of ventilation is required
Room temperature should be maintained.2-3 F
Ceilings should not be there as by double stockings more pigs be there so no ceilings provide more area to ventilate.
Deficiencies created by double stocking
Decrease on ADG by increase split put age,( p< 0.00)
Lower ADFI also by 7%
Growth rate decreased to 10 wk on after weaning process.
Joe owns a business renting out properties as apartments. He is hoping to purchase an old building to create new apartment homes. Before Joe is able to purchase the building, he must work out a deal with the current owner, who has decided to sell the property. Use the drop-down menu to complete each statement. Based on the information in the passage, it is most likely that Joe lives in a economy. The building that Joe is interested in purchasing would be considered .
Answer:
Joe lives in a mixed economy.
The building is a private property
Explanation:
A mixed economy allows individuals like Joe and companies to engage in commercial activities. It gives freedom to entrepreneurs to choose the type of business they wish to operate. Joe rents out apartments to clients. He and the client enters into a tenancy agreement, which suggests the presence of regulation. Consulting the owner of the property that he wishes to purchases shows there is an authority that regulates property transactions. A mixed economy gives buyers and sellers the freedom to do business but with regulation by a central authority.
The property that Joe wishes to buy is private property. It belongs to the seller and not to the public or government. Joe can only purchase a property and acquire its title if it is private property.
Answer:
1. mixed market
2. private property
Ratios are used in financial analysis because:
a. different companies use different accounting methods.
b. raw data is difficult to evaluate across time and companies.
c. ratios are complex analysis tools.
Answer:
b. raw data is difficult to evaluate across time and companies.
Explanation:
There are various ratio that company determines like liquidity ratios, solvency ratios, etc
It helps the company to analyze its financial position, performance and profitability so that the company is able to take the goods decisions that help the company to accomplish its goals and objectives
Now as per the given option, the option b is correct as the raw data is difficult to analyze and evaluate between the time period and the companies
Therefore the correct option is b.
Suppose Value Home and Garden Imports issued 400,000 shares of $0.10 par common stock at $4 per share. Which journal entry correctly records the issuance of this stock?
a. Debit Credit
Common Stock—$0.10 Par Value 1,600,000
Cash 40,000
Paid-ln Capital in Excess of Par—Common 1,560,000
b.
Common Stock—$0.10 Par Value 1,600,000
Cash
c.
Cash 1,600,000
Common Stock—$0. 10 Par Value 40,000
Paid-ln Capital in Excess of Par—Common 1,560,000
d.
Cash 1,600,000
Common Stock—$0. 10 Par Value 1,600,000
Answer:
The correct general entry is,
Cash 1,600,000 Dr
Common Stock-$0.10 Par value 40000 Cr
Paid-ln Capital in Excess of Par—Common 1,560,000 Cr
Option c is the correct answer
Explanation:
The issuance of stock will mean an inflow of cash to the company as a result. The cash received will be equal to the number of shares issued multiplied by the value at which they are issued.
Thus, cash received will be = 400000 * 4 = $1600000
As the asset is increasing, the cash will be debited.
On the other side of the transaction, the issuance of stock is always recorded at the par value in the common stock account and any amount received in excess of par value is credited to the Paid-in-Capital in excess of par-Common Stock account.
Thus, Common stock will be credited by = 400000 * 0.1 = $40000
The remaining = 1600000 - 40000 = 1560000 will be credited to Paid-in-Capital in excess of par-Common Stock account.
When you listen, you are the___________ of the message.
Answer:
reciever
Explanation:
when you listen you are the receiver and there after you should give the relevant feed back
A firm have an inventory turnover of 5 times a year on a cost of goods sold of $800 000.if the firm improves the inventory turnover to 8 times a year while the cost of goods sold remains the same, which of the following statement is true?
A)$100,000 is additionally invested in purchasing stock
b)$160,000 is released into working capital
c)$60,000 is additionally invested in purchasing stock
d)$60,000 is released into working capital
Answer:
d) $60,000 is released into working capital
Explanation:
Inventory turnover is the number of times that a firm buys and sells inventory. A high inventory means that the company sells its stock many times in a year.
the formula for inventory turnover ratio
=Cost of goods sold/ average inventory
If a firm has COGS of $800,000 and an inventory turnover of 5, then the average inventory will be
=$800,000 /5
=$160,000
If the firm improves its turnover to 8, then the average inventory will be
=$800,000/8
=$100,000
The firm average inventory will $100,000 as opposed to $160,000 previously.
$60,000 will be released to working capital.
Purpose of listening in communication
Answer:
Listening skill allows one to make sense of and understand what another person is saying. In other word listening skills allow people to understand what someone is talking about -the meaning behind the word.. The ability to listen carefully allows worker to better understand assignments they are given.
1. When has your level of performance been directly affected by your motivation?
Answer:
Softball
Explanation:
I hate doing softball now so i dont preform as well
Banks and credit unions serve as:
O intermediary between savers and borrowers
O Influence the inflation rate
Creators of financial products
A marketplace where people can buy and sell stock
Answer:
intermediary between savers and borrowers
Explanation:
Banks and credit unions are types of financial institutions that accept deposits and issue loans to customers and members. By accepting deposits, these institutions accumulate huge amounts of money in their custody. They use this money to issues loans for other customers.
Banks and credit unions make profits from interest charged on loan issued. They accept deposits are lower rates and issues loans at a higher interest rate. These institutions act as intermediaries for collecting resources for businesses and individuals to borrow.
Sheffield Corp. traded machinery with a book value of $978480 and a fair value of $906000. It received in exchange from Ivanhoe Company a machine with a fair value of $1023780. Sheffield also paid cash of $102378 in the exchange. Ivanhoe’s machine has a book value of $978480. What amount of gain or loss should Sheffield recognize on the exchange (assuming lack of commercial substance)?
Answer:
Gain $72,480
Explanation:
Calculation for the amount of gain or loss that Sheffield should recognize on the exchange
Using this formula
Gain/Loss= Book value – Fair value
Let plug in the formula
Gain/Loss= $978,480 – $906,000
Gain=$72,480
Therefore the amount of gain or loss that Sheffield should recognize on the exchange will be $72,480
Issuing a $1,000 par value bond with a yield to maturity of 10%. The company is in a 35 percent marginal tax bracket. What will be the firm’s after-tax cost of debt on the bond?
Answer:
6.50%
Explanation:
The after-tax cost of the debt is the yield to maturity after having deducted the tax shield which is computed using the formula below:
after-tax cost of debt=pretax cost of debt*(1-tax rate)
pretax cost of debt=yield to maturity=10%
tax rate=35%
The after-tax cost of debt=10%*(1-35%)
The after-tax cost of debt=10%*65%
The after-tax cost of debt=6.50%
Dr. North is a busy doctor who also has three kids. Based only on this information, which source of stress is she most likely suffering from?
a. individual task demands
b. demands created by individual differences
c. work-life conflict
d. group demands
e. organizational demands
Answer:
c. work-life conflict
Explanation:
The kind of stress she is going through bis the work-life crisis. As a doctor her job is very demanding and as a mother to three kids her role at home is also likely to cause stress.
She is suffering from this because her job as a doctor demands that she attends to different patients daily, Which causes her to be exhausted and as a mom she is having difficulty paying much attention to her children. Thereby making her stressed.
Big Valley has a times interest earned ratio that is _________, which indicates that Big Valley has _________ long-term insolvency risk than the typical firm in the industry.
a. 4; the same
b. 3.91; less
c. 3.91; more
d. 4.58; more
e. 4.58; less
Answer:
C. 3.91; more
Explanation:
the first part of the question is missing. It involved several aspects of Big Valley including its current and quick ratios, ROE and how they compare to the industry's average (they are generally lower than the industry's average).
This particular question refers to times interest earned ratio = EBIT / interest expense = 3.91, and how it compares to the industry's average (it is higher than the industry's average).
Since Big Valley performs poorly against the industry's average when comparing the other 3 metrics, but performs very well in the times interest ratio, it means that Big Valley has a low debt ratio. A low debt ratio results in lower financial leverage and lower interest expense.
Which of the following is a cost of not carrying enough inventory?
a. possible worker layoffs.
b. customer disappointment
c. all of these
d. lost sales.
Answer:
c
Explanation:
if you don't have enough to sell you lose sales.
You also lose selection and can also not have what a customer wants so that would leave in customer disappointment.
then you could also not have alot of money to pay your workers which would possibly result in worker layoffs
What methods can you use for setting the price? What tools are available for measuring the impact on your price decision?
Answer:
What methods can you use for setting the price? What tools are available for measuring the impact on your price decision?
In marketing we call it the 4 P's
1) Product
2) Price
3) Promotion
4) Place (location)
it is not easy to rule India with only one government
Jeannie plans to deposit $6,000 in a money market sinking fund at the end of each year for the next four years. What is the amount that will accumulate by the end of the fourth and final payment if the sinking fund earns 9% interest
Answer:
$27,439
Explanation:
Calculation for the amount that will accumulate by the end of the fourth and final payment
First step is to find the FV of an ordinary annuity of $1 using the table
FV=?
Number of years= 4
interest= 9%
Hence,
FV of of an ordinary annuity of $1 =4.5731
Now let calculate the that will accumulate by the end of the fourth and final payment
End of the fourth and final payment Accumulated amount = $6,000 × 4.5731
End of the fourth and final payment Accumulated amount = $27,439
Therefore the amount that will accumulate by the end of the fourth and final payment will be $27,439
A company had a beginning balance in retained earnings of $43,900. It had net income of $6,900 and declared and paid cash dividends of $5,850 in the current period. The ending balance in retained earnings equals:________
a. $5,850
b. $12,750
c. $42,850
d. $44,950
e. $56,650
Answer: d. $44,950
Explanation:
Dividends are to be paid from Retained earnings so the ending retained earnings are;
= Beginning retained earnings + Net income - dividends
= 43,900 + 6,900 - 5,850
= $44,950
Wilson, Inc., has a current stock price of $43.00. For the past year, the company had net income of $7,100,000, total equity of $21,750,000, sales of $40,700,000, and 5.8 million shares of stock outstanding. a. What are earnings per share (EPS)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the price-earnings ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the price-sales ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is the book value per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) e. What is the market-to-book ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
a. What are earnings per share (EPS)?
earnings per share = (net income - preferred dividends) / average outstanding common stocks = $7,100,000 / 5,800,000 = $1.22
b. What is the price-earnings ratio?
price earnings ratio = stock price / EPS = $43 / $1.224138 = 35.13
c. What is the price-sales ratio?
price sales ratio = market capitalization / total revenue = ($43 x 5,800,000) / $40,700,000 = $249,400,000 / $40,700,000 = 6.13
d. What is the book value per share?
book value per share = total equity / outstanding shares = $21,750,000 / 5,800,000 = $3.75
e. What is the market-to-book ratio?
market to book ratio = market value per stock / book value per stock = $43 / $3.75 = 11.47
nce Albert Canning PLC had a net loss of £18,137 on sales of £279,386. a. What was the company’s profit margin? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. In dollars, sales were $359,815. What was the net loss in dollars? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
Albert Canning PLC
a) Profit margin = -6.49%
b) The net loss in dollars = -$23,351.99
Explanation:
a) Data and Calculations:
Net loss = £18,137
Sales = £279,386
Profit margin = (Net loss)/Sales * 100
= -£18,137/£279,386 * 100
= -6.49%
b) Sales in dollars = $359,815
The net loss in dollars = $359,815 * -6.49%
= $23,351.99
c) The profit margin is expressed in percentage terms. It depicts the relationship between the profit and the sales revenue.
A stock is expected to pay a dividend of $0.50 at the end of the year (i.e., D1 = $0.50), and it should continue to grow at a constant rate of 9% a year. If its required return is 12%, what is the stock's expected price 1 years from today? Round your answer to two decimal places. Do not round your intermediate calculations.
Answer:
P1 = $18.16667 rounded off to $18.17
Explanation:
Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,
P0 = D1 / (r - g)
Where,
D1 is dividend expected for the next period /year g is the growth rate r is the required rate of return or cost of equity
To calculate the price of the stock today (P0), we use the dividend expected for the next period (D1). Similarly, to calculate the price of the stock one year from today (P1), we will use D2.
P1 = 0.5 * (1+0.09) / (0.12 - 0.09)
P1 = $18.16667 rounded off to $18.17
The result of inspection of samples taken over the past 11 days is given below. The sample size is 100 per day. Day 1 2 3 4 5 6 7 8 9 10Defectives 7 9 9 11 7 8 0 11 13 2What are the upper and lower control limits?
Answer:
UCL(p) = 0.157
LCL(p) = 0
Explanation:
Number of samples (n) = 10
Size of sample (n) = 100
We compute the defective rate P as below
P = 7 + 9 + 9 + 11 + 7 + 8 + 0 + 11 + 13 + 2 / 10 * 100
P = 77 / 1000
p = 0.077
We derive σP / value of standard deviation of the sampling distribution as shown below
σP = √P * (1-P) / n
σP = √0.077 * (1 - 0.077) / 100
σP = √0.077 * 0.923/100
σP = √0.071071/100
σP = √0.00071071
σP = 0.02665
Now we calculate the Upper Control chart limit:
UCL(p) = P +Z*σP
UCL(p) = 0.077 + 3*0.02665
UCL(p) = 0.077 + 0.07995
UCL(p) = 0.15695
UCL(p) = 0.157
Now we calculate the Lower Control chart limit:
LCL(p) = P - Z*σP
LCL(p) = 0.077 - 3*0.02665
LCL(p) = 0.077 - 0.07995
LCL(p) = -0.00295 (Negative defect cannot go beyond Zero)
LCL(p) = 0
1. Which one of the following is considered a consumer fraud scheme?
a. Bait and switch.
b. Bait and catch.
c. Advertising.
d. Spam emails.
PLEASE ANSWER AS SOON AS POSSIBLE