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Nadusha1986 [10]
1 year ago
13

Green Caterpillar Garden Supplies Inc. just reported earnings after tax (also called net income) of $9,250,000 and a current sto

ck price of $12.00 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 3,000,000 new shares of stock (raising its shares outstanding from 5,500,000 to 8,500,000). If Green Caterpillar’s forecast turns out to be correct and its price/earnings (P/E) ratio does not change, what does the company’s management expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places.)
Business
1 answer:
lana66690 [7]1 year ago
6 0

Answer:

$9.71

Explanation:

The computation of stock price is shown below:-

Current EPS = Net Income ÷ Number of Common Shares Outstanding

= $9,250,000 ÷ 5,500,000

= $1.68

Current P/E ratio = Current stock price ÷ Current EPS

= $12 ÷ $1.68

= 7.14

Next year's EPS = $9,250,000 × 1.25 ÷ 8,500,000

= $1.36

Next year's stock price = $ 1.36 x 7.14

= $9.71

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trapecia [35]

Answer:

a. What are the maximum and minimum cycle times?

The maximum cycle time is 60 minutes and the minimum cycle time is 2.4 minutes.

b. How much daily output will be achieved by each of those cycle times?

Daily output = CT = A/R

For max CT = 480/60 = 8 units per day

For min CT = 480/2.4 = 200 units per day.

2. In problem 1, suppose the line is balanced using 14 workstations and a finished product can be produced every 4.5 minutes.

a. What is the production rate in units per day?

CT = A/R or 4.5 = 480/R or R = 106.66 units/day

b. What is the assembly-line efficiency?

Efficiency = 60/[4.5(14)] =0.95 or 95.2% percent efficiency.

5 0
1 year ago
Knowledge Check 01 Which of the following statements about valuation allowances are true? (Select all that apply.) Check All Tha
Alina [70]

Answer:

• Under U.S. GAAP, companies recognize deferred tax assets and then reduce those assets with an offsetting valuation allowance if its is not more likely than not that the asset will be realized.

• Under IFRS, deferred tax assets only are recognizefd to begin with if its is probable (defined as '' more likely than not'') that they will be realized.

Explanation:

A deferred tax asset occurs when taxes are either been overpaid or there's an advance payment for them. In this scenario, they're not yet acknowledged in the income statement.

Valuation allowance is a reserve used by a business to offset the deferred tax asset. The statements that are true about the valuation allowance are:

• Under U.S. GAAP, companies recognize deferred tax assets and then reduce those assets with an offsetting valuation allowance if its is not more likely than not that the asset will be realized.

• Under IFRS, deferred tax assets only are recognizefd to begin with if its is probable (defined as '' more likely than not'') that they will be realized.

7 0
2 years ago
Starlight Movies markets its DVDs and Blu-rays online. Recently, Starlight adopted a new program that offers their current custo
marusya05 [52]

Answer:

Customer loyalty strategy

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1 year ago
Suppose the yield on a 10-year T-bond is currently 5.05% and that on a 10-year Treasury Inflation Protected Security (TIPS) is 1
Serhud [2]

Answer:

c. 2.35%

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10 year TIPS yield = 1.8 % ( let it be r* )

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Expected Inflation = rT10 - r* - MRP

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Therefore, The expected rate of inflation over the next 10 years is 2,35%.

4 0
1 year ago
The spread between the interest rates on Baa corporate bonds and U.S. government bonds is very large during the Great Depression
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Answer:

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Explanation:

5 0
2 years ago
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