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fiasKO [112]
1 year ago
15

The Brown Company just announced that they will be increasing their annual dividend to $1.68 next year and that future dividends

will be increased by 2.5% annually. How much would you be willing to pay for one share of the Brown Company stock if you require a 12% rate of return?
Business
1 answer:
stepladder [879]1 year ago
5 0

Answer:

Current price of Brown Company = $17.68

Explanation:

Using dividend growth model we have

P_0 = \frac{D_1}{K_e\: -\: g}

Where,P_0 = Current price of share

D_1 = Dividend to be paid at year end = $1.68 as provided,

K_e = Cost of equity or expected return on equity = 12% as provided,

g = growth rate = 2.5% as provided,

Now putting the values in above we have

P_0 = \frac{1.68}{0.12 - 0.025}

P_0 = \frac{1.68}{0.095}

P_0 = 17.68

Current price of Brown Company = $17.68

This is the price every person would be willing to pay at current level.

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On April 30, Gomez Services had an Accounts Receivable balance of $33,400. During the month of May, total credits to Accounts Re
swat32

Answer:

The amount of credit sales during may is $62,400.

Explanation:

credit sales = accounts receivable balance on 31 may + total credits to accounts receivable - accounts receivable balance on 30 april  

                   = $27,000 + $68,800 - $33,400

                   = $62,400

Therefore, the amount of credit sales during may is $62,400.                    

7 0
1 year ago
Ariana loves new electronic products, but she also wants to make sure she gets a good value for her money. Therefore, she typica
qwelly [4]

Answer:

This question lacks answers. Here they are:

A) ​Early adopter  

B) ​Early majority  

C) ​Innovator  

D) Late majority  

E) ​Laggard

Answer is B) <em>​Early majority  </em>

Explanation:

These are the adoption categories. They measure how inclined a customer is to adopting a new product or technology. Each category describes the main aim and goal of the customer when trying the new product.

Naturally, all categories are on the gradual scale:

Innovators -> Early adopter -> Early majority -> Late Majority - > Laggard

with the <em>innovator</em> being the group that is adopting the product immediately after launch, while the <em>laggard</em> is very change-resistant, rarely making choices regarding the adoption of something new.

The thinnest line is probably the difference between <em>early adopters</em> and the <em>early majority</em>. Early adopters are not as fast as innovators when it comes to product adopting and they are often doing it because of coolness or the "wow" factor of the product. Although the time of adoption for the early majority is the same or a little bit longer than early adopters, the key difference is that the early majority puts functionality over coolness when something is new and ready for adoption.

In this example, Ariana want to receive great functionalities for the given money, so she turns to ratings, reviews and recommendations from early adopters and innovators (Eric). Eventually, when it is determined that the product proves its value, the early majority adopts it.

8 0
2 years ago
Let's say that you choose to buy bread in a grocery store. According to the marginal benefit and marginal cost principle, how ma
snow_lady [41]
Six is your answer because if it cost $2.00 and you have 4 it makes sense
8 0
1 year ago
Gilbert Company made an ordinary repair to a delivery truck during 2016 at a cost of $500 and capitalized the repair cost. What
Leto [7]

Answer:

The answer is:

Asset will be overstated

Net income will be overstated

Explanation:

Because of the incorrect capitalization(the process of converting or adding to a firm's asset):

1. Assets are overstated. Assets that shouldn't are added to the entire assets are added. So it's increasing the company's asset whereas it's not.

2. Net income are overstated. Because depreciation too will have to be charged for the asset that wasn't there, therefore, net asset will be overstated.

7 0
1 year ago
Ray Jene earns $900 a week at a Publix supermarket. Ray's payroll deductions are 28%. What is Ray's take-home pay?
kaheart [24]
If Ray earns $900 a week and deductions are 28% Ray's take home pay is:
$648 a week

If we assume that the deductions of 28% are taken out of the $900 weekly we will multiply 900 by 0.28 = 252. Then subtract 252 which is the deduction amount from the 900 and we end up with take home pay of $648.
7 0
1 year ago
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