Answer:value of stock for the required return of 12 % = $53
Explanation:
Given
current dividend just paid = $3.00
dividend to grow at constant rate of 6%
required rate of return =12%
to calculate the value of stock for the requitred return of 12 % , we use the dividend growth model which is
Current price = dividend ( 1 + growth rate )/ (required rate -growth rate )
= 3 x (1+6%) / 12-6 = 3 x 1.06 /6% =3.18/0.06= $53
Therefore value of stock for the requitred return of 12 % ,= $53
Answer:
The amount paid should be $1,600
Explanation:
The terms of 2/10, n/30 means 2% discount for the payment within 10 days and the full amount to be paid within 30 days.
Beacon Food Stores purchased canned goods at an invoice price of $4,000. Half of the goods were returned immediately to the supplier.
The remaining amount of the invoice that Beacon Food needs to pay is $2,000
Beacon Food pays the remaining amount of the invoice within the discount period. The amount of discount the company is offered = $2,000 x 2% = $40
The amount paid = $2,000 - $40 = $1,600
Answer:
You must deposit $14,824.07
Explanation:
Giving the following information:
Sister:
Investment= $14,000
Interest rate= 10.5%
Number of years= 9
You:
Investment=?
Interest rate= 9.8%
Number of years= 9
First, we need to calculate the future value of your sister:
FV= PV*(1+i)^n
FV= 14,000*(1.105^9)= $34,386.55
Now, we can determine your deposit:
PV= FV/(1+i)^n
PV= 34,386.55/ (1.098^9)= $14,824.07
Answer:
A. 1,406
Explanation:
Double-declining balance formula = 2 X Cost of the asset X Depreciation rate
The cost of asset = $7,500
salvage value = $500
estimated useful life = 8years
To calculate the depreciation value using Double-declining balance formula = 2 X Cost of the asset X Depreciation rate
Depreciation rate = 1/useful life *100 = (1/8) * 100 = 12.5%
Therefore
2 x $7500 x 12.5% = $1,875 - year 1
for the second year the cost of asset will be$ 7,500 - $1,875 = $5625
2 x $5625 x 12.5% = $1,406.25
Therefore the answer is $1,406
