Answer:
$6.3 per share
Explanation:
There are two method of Valuation of the firm
- Weighted average cost of the capital (WACC)
- Free cash flow to equity (FCFE)
We have to calculate the value of the firm using FCFE. Free cash flow to equity (FCFE) is the amount of cash flow generated by the business and potentially available for distribution among the stockholders.
Value of firm = Free cash flow / required rate of return = $120,000 / 12% = $1,000,000
Market value of Equity = Total value of firm - Market value of Debt - Market value of Preferred share
Market value of Equity = $1,000,000 - $300,000 - $70,000 = $630,000
Value of Patrick's stock = Market Value of equity / shares of stock outstanding = $630,000 / 100,000 = $6.3 per share
Answer:
The budgeted production of Product A for the year would be is 20,400 units
Explanation:
Since in the question, the ending inventory is 20% higher than beginning inventory.
So,
Let us assume the beginning inventory is based on 100. So, for ending inventory it would be 100 + 20 = 120
Now,
Method 1 : Ending inventory = 2,000 × 120 ÷ 100
= 2,400
Method 2 : Ending inventory = 2000 + 2000 × 20%
= 2000 + 400
= 2400 units
In both the methods, the answer is same
After considering the ending inventory, the budgeted could be calculated by using the equation which is shown below:
= Ending inventory + Forecast sales - beginning inventory
= 2,400 + 20,000 - 2,000
= 20,400 units
Thus, budgeted production of Product A for the year would be is 20,400 units.
Answer:
$20,000
Explanation:
Allowance for uncollectible accounts will be 2% of its accounts receivable = 2% * 900,000 = $18,000
the balance of the Allowance for Doubtful Accounts after year-end = a credit balance of $2,000 + allowance for uncollectible accounts in year of $18,000
= $20,000
Answer:
The answers are:
<u>January 10</u>
Cash $816,000
Common stock $510,000
Contributed capital in excess
of par value, common stock $306,000
<u>January 15</u>
Equipment $80,000
Common stock $50,000
Contributed capital in excess
of par value, common stock $30,000
<u>February 1</u>
Organizational expenses $3,000
Common stock $25,000
Contributed capital in excess
of par value, common stock $500
Explanation:
Contributed capital in excess of par value is the amount of money (or other assets) over the par value of stock (in this case $5 per common stock) that the company received form shareholders in exchange for stock.
