Answer:
The price of the stock six years from now will be $56.94
Explanation:
To calculate the price of a stock that pays a dividend which grows at a constant rate forever, we use the constant growth model of DDM. The current price of stock using the constant growth model is calculated as follows,
P0 = D1 / r - g
As, we don't know the D1, that is dividend expected for the next year, we will calculate it first,
45 = D1 / (0.12 - 0.04)
45 * (0.12-0.04) = D1
45 * (0.08) = D1
3.6 = D1
We use the D1 to calculate the price today. Thus, we will use D7 to calculate the price six years from now.
D7 = D1 * (1+g)^6
P6 = 3.6 * (1+0.04)^6 / (0.12 - 0.04)
P6 = $56.939 rounded off to $56.94
Answer:
The correct answer is option B.
Explanation:
The changes in the exchange rate will affect those domestic firms that sell their products in the foreign market or those domestic firms that produce and sell domestically but has foreign companies as competitors.
If the exchange rate falls, the price of domestic firms will decline as compared to imports. This will create more demand for domestic goods.
If the exchange rate increases domestic goods will become costlier and imports will become cheaper. This will increase the demand for imports.
Answer:
a. Regulatory compliance costs - Fixed cost
b. Salaries of top management and key personnel - Fixed cost
c. Cost of metal used in manufacturing - Variable cost
d. Cost of wood used in manufacturing - Variable cost
e. Mortgage payments - Fixed cost
f. Industrial equipment costs - Fixed cost
g. Interest on debt - Fixed cost
h. Postage and packaging costs - Variable cost
Explanation:
The cost which is affected by the production of units is known as variable cost. The cost which does not vary with the units produced is fixed cost. Fixed cost does not change from period to period irrespective of level of output and is usually same for a certain period. It is easy to budget for fixed costs instead of variable cost. Variable cost changes every period and is based on company's output.
Answer
The answer and procedures of the exercise are attached in the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Answer:
$2,938
Explanation:
Calculation to determine what amount of joint processing cost is allocated to Product A Using sales value at split-off,
First step is to calculate the Total for Product A and C
Product A 1,800* $7.00= $12,600
Product C 2,600* $10.00= $26,000
Total $38,600
($12,600+$26,000)
Now let calculate amount of joint processing cost is allocated to Product A
Joint processing cost is allocated to Product A=$(12,600/38,600)*$9,000
Joint processing cost is allocated to Product A = $2,938
Therefore Using sales value at split-off, what amount of joint processing cost is allocated to Product A is $2,938
