Answer:
Quarterly dividend = $1.00
Required rate of return per annum = 8% = 0.08
Quarterly rate of return = 0.08/4 = 0.02
Current market price = <u>Quarterly dividend</u>
Quarterly required rate of return
= $1.00
0.08
= $12.5
The amount to pay for 1,000 shares = $1.25 x 1,000 = $12,500
Explanation:
The current market price is calculated as quarterly dividend paid divided by quarterly required rate of return. Then, we will multiply the current market price by the number of shares in order to determine the total amount to pay for the shares.
Answer:
The adjusted bank and book balance is shown below:-
Explanation:
The computation of the adjusted bank and book balance is given below:-
Bank statement balance Book balance
Opening balance $26,960 $26,620
Add: Transit Deposit $3,000 Earned Interest $150
Less: Outstanding check 4000 Error on check $810
($4,900 - $4,090)
Adjusted Balance $25,960 $25,960
Answer:
$11,560
$5666.661
Explanation:
Given the following :
Bill received from accountant = $17,000
This year's marginal tax rate = 32%
Next year's marginal tax rate = 37%
After tax return on investment = 11%
After tax cost of bill is paid in December :
Billed amount * this year's tax rate
$17,000 * ( 1 - 0.32)
= $17,000 * 0.68
= $11,560
B) After tax cost of bill was paid in January:
Billed amount * next year's tax rate * PV factor
From the present value factor table;
PV factor (1 years, 11%) = 0.9009
Hence,
$17,000 * 0.37 * 0.9009 = $5666.661
Answer:
A. 12.3%
B. 68%
Explanation:
a.Calculation to determine the required return for the project
Required return=(0.62/1.62*5.7%)+(1/1.62*13.2%)+2%
Required return=0.022+0.081+2%
Required return=0.124*100
Required return=12.3%
Therefore the required return for the project will be 12.3%
b. Calculation to determine the maximum cost the company would be willing to pay for this project
Maximum cost =6.3/(12.3%-3%)
Maximum cost =6.3/9.3%
Maximum cost =0.67.7*100
Maximum cost =67.7%
Maximum cost=68% (Approximately)
Therefore the maximum cost the company would be willing to pay for this project will be 68%
Answer: $80
Explanation:
Opportunity cost is the benefit that is foregone for an individual by choosing one alternative over other alternatives available to him.
If the opportunity cost is lower for an individual then this will benefit him whereas if the opportunity cost is higher then this will not benefit the individuals.
The opportunity cost of writing a term paper is $80 that she values by going out with a friend and it is the higher cost alternative.
