Answer:
$73.47
Explanation:
2.87 is the current dividend paid (D0)
Use that to find dividends for the next 5 years;
D1 = D0(1+g) ; g being the growth rate
D1 = 2.87(1.08) = 3.0996
D2 = 3.0996(1.08) = 3.3476
D3 =3.3476(1.08) = 3.6154
D4 = 3.6154(1.08) = 3.9046
D5 = 3.9046(1.08) = 4.2170
Next, find terminal cashflows;
D6 (yr 2024) = 4.2170 (1.03) = 4.3435
Find Present values of all the dividends using the 8% discount rate with the formula; PV = FV/
PV(D1) = 2.87
PV(D2) = 2.87
PV(D3) = 2.87
PV(D4)= 2.87
PV(D5)= 2.87
PV of terminal value; PV(D6 onwards) = 
= 59.1223
Sum up the PVs to find value per share;
$2.87 +$2.87 +$2.87 +$2.87 +$2.87+ $59.1223 = $73.47
Calculating average cost of steak initially when only 5000 pounds was produced
Average cost= 50000/5000
AC= 10$
Now when 1 pound is added only 9$ is added in total cost so marginal cost
MC= 9$
From above calculations we can see that AC>MC
so we can say that the average cost of production is greater than marginal cost so it will be beneficial to produce more
Answer:
213 Unfavorable
Explanation:
Given that,
Direct labor-hours used to produce this output = 2,130
Actual variable overhead rate = $6.10 per hour
Variable overhead per hour = $6.00
The variable overhead rate variance for July:
= Direct labor-hours used to produce this output × (Actual variable overhead rate per hour - Variable overhead per hour)
= 2,130 × ($6.1 - $6)
= 213 Unfavorable
Answer:
5) about two out of three small firms close within five years of their founding.
Explanation:
A prefer to use statistics in a positive way an disclose not the failure rates of small businesses (which are really high), but instead focus on the success rate.
from the total original amount (100%)
- 80% of small businesses survive their first year of operations
- 70% of small businesses survive their second year of operations
- between 40-50% of small businesses survive their fifth year of operations
- only 30% survive their tenth year
Answer:
WACC = 6.66
%
Explanation:
<em>Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund</em>
WACC = (Wd×Kd) + (We×Ke)
After-tax cost of debt = Before tax cost of debt× (1-tax rate)
Kd-After-tax cost of debt = 5%
Ke-Cost of equity = 11.4%
Wd-Weight f debt -74%
We-Weight of equity = 26%
WACC = (0.74× 5%) + (0.26 × 11.4%) = 6.66
%
WACC = 6.66
%
