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2 years ago

If D1 = $1.25, g (which is constant) = 5.5%, and P0 = $40, what is the stock's expected total return for the coming year?

Business

1 answer:

trapecia [35]2 years ago

3 0

Answer:

The expected totar return is: 8,625%

Explanation:

Total return, when measuring performance, is the actual rate of return of an investment or a pool of investments over a given evaluation period. Total return includes interest, capital gains, dividends and distributions realized over a given period of time. Total return is the amount of value an investor earns from a security over a specific period, typically one year.

The formula for the total stock return is the appreciation in the price plus any dividends paid, divided by the original price of the stock.

Total stock return= [(P1-P0)+D]/P0

P0: initial stock price

P1: Ending stock price (Period 1)

D0: dividend

In this case, we do not have P1. So we have to use an alternate version of the Gordon Growth Model. The GGM is mainly applied to value mature companies that are expected to grow at the same rate forever.

P= D1/(r-g)

where:

P=Current Stock Price

g=Constant growth rate in perpetuity

expected for the dividends

r=Constant cost of equity capital for that

company (or rate of return)

D1=Value of the next year’s dividends

By moving terms and isolating "r" we achieve the following formula:

r= D1/P+g

r=1,25/40+0,055= 8,625%

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Wilson is offered a job in Kansas City that pays $50,000 and a job in Dallas that pays $60,000. Which pair of CPIs would ensure

Svetradugi [14.3K]

Answer:

option C is correct CPI in Kansas City is 125 and in Dallas is 150.

Explanation:

given data

Kansas City pays = $50,000

Dallas that pays = $60,000

solution

we know that CPI base year is always = 100

first we get here real salary value in Kansas City that is express as

Real Value = Salary in Kansas City × (CPI base year ÷ CPI current year) ..........1

put her value we get

Real Value = $50,000 × $\frac{100}{125}$

Real Value = $40000

and now we get here real salary value in Dallas that is express as

Real Value = Salary in Dallas City × (CPI base year ÷ CPI current year) ..........2

put her value we get

Real Value = $60,000 × $\frac{100}{150}$

Real Value = $40000

so now we can see that both value is same in both city with CPI Kansas City = 125 and CPI Dallas = 150

so here correct option is c. 125 in Kansas City and 150 in Dallas

4 0

2 years ago

Olivia Village was recently incorporated and began financial operations on July 1, 20X2, the beginning of its fiscal year. The f

sergey [27]

Answer:

Olivia Village

Journal Entries:

July 1, 20X2 to June 30, 20X3:

1. No journal entry required.

2. Debit Property Taxes Receivable $390,000

Credit Property Tax Revenue $390,000

To record the levying of property taxes

Debit Uncollectible taxes expense $7,800

Credit Uncollectible tax expense $7,800

To record the estimated uncollectible of 2%.

3. Debit Marketable Securities $50,000

Credit Restricted Trust Fund Donations $50,000

To record the donation of marketable securities.

Debit Restricted Trust Fund $5,500

Credit Marketable Securities Revenue $5,500

To record the revenue earned on marketable securities.

4. Debit Internal Service Fund $5,000

Credit General Fund $5,000

To record the transfer of funds.

5. Debit Special Assessment Fund $72,000

Credit Special Assessment Bonds $72,000

To record the issue of bonds for special assessment project.

Debit Special Assessment Receivable $24,000

Credit Special Assessment Levy $24,000

To record the special assessment levied

6. Special Assessment Fund $27,000

Credit Special Assessment Receivable $24,000

Credit General Fund $3,000

To record the collection of the first year's special assessment and transfer from General Fund.

7. Debit Capital Projects Fund $75,000

Credit Contractor Payable $75,000

To record the letting of the contract for lighting.

June 30, 20X3:

Debit Contractor Payable $75,000

Credit Capital Projects Fund $75,000

To record the payment of the contractor for the project.

8. Debit Supplies $1,900

Credit Internal Service Fund $1,900

To record the purchase of various supplies.

9. Debit General Fund $393,000

Credit Property taxes Receivable $386,000

Credit Licenses and permit fees $7,000

To record cash collections for general fund

Debit Allowance for Uncollectible taxes $3,800

Credit Uncollectible Expenses $3,800

To adjust the allowance for uncollectible taxes to $4,000 balance.

10. Debit General Fund $500,000

Credit Bonds Payable $500,000

To record the issue of 6%, 20-year bonds payable.

11. Debit Fire Truck $15,000

Credit General Fund $15,000

To record the payment for the purchase of a fire truck.

Explanation:

Olivia Village can use the general journal to initially record transactions that occur during the year. The journal shows the accounts to be debited and the accounts to be credited.

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2 years ago

A supply curve slopes upwards because a. the quantity supplied in insensitive to price b. an increase in price brings the quan

lapo4ka [179]

Answer:

The correct answer is the option C: the higher the price the higher the quantity that the sellers are willing to supply.

Explanation:

To begin with, to understand why the supply curve slopes upwards we need to understand that <u>there is a direct relationship</u> between the quantity that the suppliers are willing to sell and tha price of the product offered and therefore that when the price increases the amount that the suppliers will be willing to offer will increase due to that direct relationship and that is reason why the supply curve slopes upwards.

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2 years ago

Mr. Crane is the manager of a video production company. To maximize efficiency, he assigns associates to departments (e.g. film

frez [133]

Answer:

Mr. Crane must first draw the interests and abilities of the companions. Some of them might be logically very good and obsessive in some parts (film division, editing division, sound division, etc.) but they might be assign to some other division. This will enhance in their low level of satisfaction and motivation. This will also assist Mr. Crane in conveying the divisions as per comforts of the associate as possible.

Explanation:

Mr. Crane must achieve an unidentified Response Survey between staffs so that their disquiets and problems can be carried out. Some individuals might not give this response openly.

Mr. Crane must also look at some of the work structures which are very serious for employee’s job satisfaction:

Operational time (Are Associates working long hours?)
Pay and compensation (Are they paid less than market rates?)
Training and learning opportunities
Traditional and sport actions to keep staffs involved
Inspiration from leaders

Mr. Crane must find out the points through above methods and effort to discourse them so that staffs feel pleased and motivated. He can also initiate Rewards & Recognition program to escalate good workers. This will also improve their motivation.

8 0

2 years ago

Management's philosophy at Nike has often been that a fit body contributes to more productivity at work. Nike provides exercise

algol13

Answer:

Corporate policy

Explanation:

Corporate policy is a set of procedures recommendations that is based on the analysis of internal and external factors that will benefit the organization to cope up with problems and avoid an adverse outcomes.

The reason is that the company wants to increase the productivity of its labor which will help them to control cost by encouraging its employee to exercise daily. This act was not oriented towards to benefit employee, it was purely for the increase in productivity. So this serious position on fitness is its part od corporate policy.

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2 years ago