The highest price you should be willing to pay for this stock is $62.50.
To determine the highest price you should be willing to pay for the stock, we can use the dividend discount model (DDM) formula. The DDM calculates the intrinsic value of a stock based on its expected dividends and the required rate of return.
The formula for the DDM is:
Stock Price = Dividend / (Required Rate of Return - Growth Rate)
Let's plug in the given values:
Dividend = $5.00
Growth Rate = 10.00%
Required Rate of Return = 18.00%
Stock Price = $5.00 / (18.00% - 10.00%)
Stock Price = $5.00 / 0.08
Stock Price = $62.50
Therefore, the highest price you should be willing to pay for this stock is $62.50.
The correct option is:
O d. $62.50
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King Arthur asks Sir Bedivere to do something three times. What does Arthur ask Sir Bedivere to do? What does Sir Bedivere do, and what is the final result? Why is this action important to Arthur, and what might it symbolize? Highlight your evidence and annotate to explain your ideas. Support your response with textual evidence.
In the medieval literature, Sir Bedivere was King Arthur's loyal knight who appears in the story of Arthurian legend, called “Le Morte d’Arthur,” by Sir Thomas Malory. King Arthur asks Sir Bedivere to do something three times.
Arthur asks Sir Bedivere to throw his sword, Excalibur, into the lake, The first two times, Sir Bedivere did not throw it, but he hid it instead. Finally, Arthur asks Bedivere to fulfill his command. Sir Bedivere walks to the lake, thinks about the sword, and eventually throws it into the lake. The final result was that the Lady of the Lake catches the sword and takes it into the water. Afterward, Sir Bedivere reports back to Arthur and tells him what he saw. Arthur orders Bedivere to help him onto a barge, and they sail away. Arthur’s final fate is unknown, but it is thought that he died in battle, and his body was taken to the Isle of Avalon to be healed. Arthur's request for Sir Bedivere to throw Excalibur into the lake symbolizes the end of Arthur's reign, as well as the end of the Arthurian era.
He knew his time as king was over. He had to go and get healed on the Isle of Avalon, and thus the Arthurian era came to an end. "And so he went all that night until that he came to a chapel, and there he found a hermit that was a good man, and bade him, 'What cheer?' said the hermit unto King Arthur." This is where King Arthur went after he left Sir Bedivere. It was here that he passed away. "And when Sir Bedivere came again, King Arthur said, 'What saw thou there?' 'Sir,' he said, 'I saw nothing but waves and winds.'" Bedivere showed his loyalty by carrying out Arthur's command, and King Arthur showed his loyalty by not blaming Bedivere for not throwing the sword into the lake the first two times.
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You expect that Red Dragon Corporation common stock in one year will be worth $41.77. In one year, Red Dragon Corporation will pay a $2.34 dividend per share on its common stock. What is the market value today of a share assuming your required return on equity investments is 17%?
A. $25.54
B. $29.49
C. $37.70
D. $41.77
E. $55.54
The market value today of a share assuming a required return on equity investments is 17% is $37.70. Hence, the option (C) is correct.
Price expected in one year (P1) = $41.77
Dividend to be paid after one year (D1) = $2.34
Return on equity investments (R) = 17%
In order to find the market value today of a share, we need to use the dividend discount model.
It is given by,P0 = D1 / (1 + R)¹ + P1 / (1 + R)¹
Now, let's substitute the values in the above formula: P0 = $2.34 / (1 + 0.17)¹ + $41.77 / (1 + 0.17)¹
P0 = $2.34 / 1.17 + $41.77 / 1.17P0 = $1.99 + $35.75P0 = $37.74
Therefore, the market value today of a share assuming a required return on equity investments is 17% is $37.70.
Hence, the option (C) is correct.
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josh made offensive noises at dinner, and got his mouth washed out with soap. he doesn't make offensive noises anymore.
Josh had made offensive noises during dinner, as a result of which he had to get his mouth washed out with soap. The incident had been quite an unpleasant one, and he had learned his lesson. Following that incident, he has not made any offensive noises.
It is possible that Josh had been making some sort of sounds that were deemed offensive during the dinner. The nature of the sounds has not been clarified in the question, so we cannot say for sure what he had been doing. However, it was evidently something that was unacceptable and warranted disciplinary action.
Josh was punished by having his mouth washed out with soap, which is an old-fashioned way of punishing a child for using foul language or behaving badly. This punishment would have been unpleasant and embarrassing for him, and it is likely that he has not repeated his mistake since then. Therefore, the incident seems to have served its purpose and taught Josh a lesson about behaving appropriately.
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Return to question 4 WebHelper Inc. acquired 100% of the outstanding stock of Silicon Chips Corporation (SCC) for $45.4 million, of which $15.8 million was allocated to goodwill. At the end of the current fiscal year, an impairment test revealed the following: fair value of SCC, $40.8 million; book value of SCC's net assets (including goodwill), $43.2 million. What amount of impairment loss should WebHelper recognize? (Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Answer is complete but not entirely correct. Impairment loss $ 2.0 x million 1.66
WebHelper Inc. acquired Silicon Chips Corporation (SCC) for $45.4 million, with $15.8 million allocated to goodwill. At the end of the fiscal year, an impairment test revealed that the fair value of SCC was $40.8 million, while the book value of its net assets (including goodwill) was $43.2 million. The amount of impairment loss that WebHelper should recognize is $2.0 million.
To determine if there is an impairment loss, the fair value of the acquired company, SCC, is compared to its book value, including the allocated goodwill. In this case, the fair value of SCC is $40.8 million, while the book value of its net assets (including goodwill) is $43.2 million.
The impairment loss is calculated by subtracting the fair value from the book value. In this situation, the impairment loss is $2.4 million ($43.2 million - $40.8 million). However, the question specifies that the correct answer should be rounded to 1 decimal place in millions, so the impairment loss is reported as $2.0 million.
Recognizing the impairment loss reflects the decrease in the value of the acquired company, SCC, compared to its carrying amount. It indicates that the goodwill initially allocated to the acquisition is no longer recoverable and needs to be written down. This adjustment is important for accurately reporting the financial position and performance of WebHelper Inc.
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- follow-up
- pre-approach
- approach
- closing-the-sale
- presentation
The step of the personal-selling process is a critical step in creating customer satisfaction and building long-term relationships with customers. 2010 (46
The step of the personal-selling process is a critical step in creating customer satisfaction and building long-term relationships with customers.
What are the steps?The personal-selling process has five basic steps which are as follows:
Pre-approach: This is the first step in personal selling, where a salesperson gathers information about prospects and researches about their potential clients. This includes getting details about the customers, identifying potential customers, evaluating their needs, and identifying ways to meet these needs.
Approach: This is the second step in the personal-selling process where a salesperson contacts a potential customer in person. This stage is important because it is when the salesperson begins to create a first impression of the company and its products.
Presentation: The third step in the personal selling process is the presentation, where the salesperson presents the product or service to the customer. This is the stage where the salesperson needs to convince the customer that the product is beneficial for them and that it will meet their needs.Closing the sale: The fourth step in the personal selling process is closing the sale.
This stage involves persuading the customer to make the purchase. The salesperson should handle any objections that the customer might have and provide them with any additional information that they need to make an informed decision.
Follow-up: This is the final stage in the personal selling process, where the salesperson follows up with the customer after the sale. This helps to create a good relationship with the customer and encourages repeat business.
The follow-up may include thanking the customer for their business, asking for feedback, and offering any additional services or products that may be of interest.
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Moss Co. issued $570,000 of four-year, 11% bonds, with interest payable semiannually, at a market (effective) interest rate of 10%. Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar.
To determine the present value of the bonds payable, we need to calculate the present value of the future cash flows associated with the bonds.
Given that Moss Co. issued $570,000 of four-year, 11% bonds with interest payable semiannually and a market interest rate of 10%, the present value of the bonds payable is approximately $605,413.
To calculate the present value of the bonds payable, we use the present value tables in Exhibit 5 and Exhibit 7.
Step 1: Determine the periodic interest rate
The annual interest rate is 11%, and since interest is payable semiannually, the periodic interest rate is 11%/2 = 5.5%.
Step 2: Determine the number of periods
Since the bonds have a four-year term with semiannual interest payments, the total number of periods is 4 * 2 = 8.
Step 3: Calculate the present value of the principal amount
Using the present value tables, we find that the present value factor for 8 periods at a periodic interest rate of 5.5% is approximately 0.663.
Present value of the principal = $570,000 * 0.663 = $377,310.
Step 4: Calculate the present value of the interest payments
Using the present value tables, we find that the present value factor for an annuity of 8 periods at a periodic interest rate of 5.5% is approximately 6.079.
Present value of the interest payments = ($570,000 * 5.5% * 6.079) = $228,103.
Step 5: Calculate the present value of the bonds payable
Present value of the bonds payable = Present value of the principal + Present value of the interest payments
= $377,310 + $228,103
= $605,413.
Therefore, the present value of the bonds payable is approximately $605,413.
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On August 1, the supples account balance was $1,520. During August, eplies of $3,900 were purchased, and $1,118 of supplies were in hand as of August 31 Determine supplies expense for August.
On August 1, the supplies account balance was $1,520. During August, supplies of $3,900 were purchased, and $1,118 of supplies were in hand as of August 31. The supplies expense for August is $3,302.
The formula for calculating supplies expense is as follows:
Supplies expense = Beginning supplies balance + Purchases − Ending supplies balance
Where,
Beginning supplies balance is the supplies account balance at the beginning of the month.
Purchases are the total cost of supplies purchased during the month.
Ending supplies balance is the value of supplies that are left at the end of the month.
Given that:
On August 1, the supplies account balance was $1,520.
During August, supplies of $3,900 were purchased, and $1,118 of supplies were in hand as of August 31.
Substituting the values in the formula,
we get:
Supplies expense = Beginning supplies balance + Purchases − Ending supplies balance
Supplies expense = $1,520 + $3,900 − $1,118
Supplies expense = $3,302
Therefore, supplies expense for August is $3,302.
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The demand function for a certain brand of outdoor plastic chairs is given by the function p=d(x) = -0.01x^2 -0.02x+8 (sxs 20) where p is the wholesale unit price in dollars and x is the quantity demanded each week during the summer, measured in units of a thousand. Evaluate and interpret the average rate of change in wholesale unit price when the quantity demanded goes from 0 to 10,000 units demanded. The wholesale unit price will drop on average - $12.00 when the quantity demanded goes from 0 to 10,000 units demanded. The wholesale unit price will drop on average - $3.00 when the quantity demanded goes from 0 to 10,000 units demanded The wholesale unit price will drop on average - $ 0.30 when the quantity demanded goes from 0 to 10,000 units demanded. The wholesale unit price will drop on average - $1.20 when the quantity demanded goes from 0 to 10,000 units demanded
According to the given information, the demand function for a certain brand of outdoor plastic chairs is given by the functionp=d(x) = -0.01x² -0.02x+8 (sxs 20) where p is the wholesale unit price in dollars and x is the quantity demanded each week during the summer, measured in units of a thousand.The average rate of change in wholesale unit price when the quantity demanded goes from 0 to 10,000 units demanded is calculated using formula.
We know that x1 = 0, and x2 = 10,000.We have to find the average rate of change in wholesale unit price, therefore we use the average rate of change formula:A.R.C = (d(x2)-d(x1))/(x2-x1)Substituting values, we get:A.R.C = (d(10,000)-d(0))/(10,000-0)A.R.C = [(0.01*10,000² + 0.02*10,000 + 8) - (0.01*0² + 0.02*0 + 8)]/10,000A.R.C = (1 - 8)/1,000A.R.C = -7/1,000A.R.C = -0.007Dollars per unitTherefore, the wholesale unit price will drop on average $0.007 when the quantity demanded goes from 0 to 10,000 units demanded.
The wholesale unit price will drop on average $0.007 when the quantity demanded goes from 0 to 10,000 units demanded.
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Marcus was recently promoted to Product Lead, which requires he participates in his division's annual capital budgeting process. A financial analyst gives him a 2 hour training on what to expect from the process, and he learns that the company primarily relies on IRR to make decisions and that the CFO has a policy in place of using 12% as the hurdle rate (required return) for all projects.
Marcus is concerned about the effectiveness of the process given this information. What issues may arise as a result of these policies? (Discuss at least two issues, 4-6 sentences total.)
Given the policies of relying on the internal rate of return (IRR) and using a fixed hurdle rate of 12% for all projects, Marcus may encounter several issues in the capital budgeting process.
1. Misalignment with project risk: The use of a fixed hurdle rate fails to consider the varying levels of risk associated with different projects. Projects with higher risk may require a higher hurdle rate to adequately account for the increased risk. Using a uniform rate may result in the acceptance of projects with inadequate returns or the rejection of potentially viable projects.
2. Neglect of alternative investment opportunities: By solely relying on IRR as the primary decision-making criterion, the capital budgeting process may overlook alternative projects with higher absolute returns or more favorable risk-return profiles. Projects with lower IRRs but higher net present values (NPVs) may be disregarded, potentially missing out on opportunities to maximize shareholder wealth.
Overall, these policies may lead to an inefficient allocation of resources, potentially resulting in the acceptance of suboptimal projects or the rejection of value-creating opportunities.
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Hutchinson Corporation will pay a dividend of $5.30 per share next year the company pledges to increase its dividend by 3.70 per cent per year indefinitely if you require a return of 9.80 per cent of your investment how much will you pay for the company stock today
If you require a return of 9.80% on your investment, you should pay approximately $90.16 for Hutchinson Corporation's stock today.
To determine the value of Hutchinson Corporation's stock today, we can use the dividend discount model (DDM) since we have information about the future dividend.
The value of the stock is the present value of all expected future dividends. Let's calculate it step by step:
1. Calculate the expected dividend for next year:
Div1 = Div0 × (1 + g)
Div1 = $5.30 × (1 + 0.037)
Div1 ≈ $5.50
2. Calculate the present value of the perpetual growth dividend stream:
PV = Div1 / (r - g)
PV = $5.50 / (0.098 - 0.037)
PV = $5.50 / 0.061
PV ≈ $90.16
The calculation assumes the dividend will increase at a constant rate indefinitely, which is a simplification. Market conditions and other factors may influence the actual stock price.
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Write short notes on the following topics: (a) Status of agri-trade balance in Zambia (b) Effect of raising interest rate on capital flow (c) Relationship between real exchange rate appreciation and cost of production in an economy (d) Link between nominal exchange rate and income from trade?
(a) Status of agri-trade balance in Zambia:
Zambia's agricultural trade balance has historically been characterized by a trade deficit. The country heavily relies on agricultural exports for revenue generation, with key commodities including maize, tobacco, sugar, and cotton. However, the value of agricultural imports, such as wheat, rice, and vegetable oils, exceeds the value of exports, leading to a negative agri-trade balance.
Several factors contribute to this imbalance. Limited value addition and processing capabilities in the agricultural sector result in lower export prices. Inadequate infrastructure, including transportation and storage facilities, also hampers the competitiveness of Zambian agricultural products. Furthermore, fluctuations in global commodity prices and weather conditions impact export earnings.
To address this imbalance, Zambia has implemented policies to promote value addition, increase productivity, and diversify agricultural exports. The government aims to enhance processing capabilities, improve infrastructure, and provide support to smallholder farmers. These efforts are crucial for achieving a more favorable agri-trade balance and ensuring food security and economic growth in Zambia.
(b) Effect of raising interest rates on capital flow:
Raising interest rates can have a significant impact on capital flows in an economy. When interest rates are increased, it tends to make domestic assets more attractive to foreign investors, leading to an inflow of capital.
Higher interest rates increase the return on investment for foreign investors, making the domestic currency more desirable. As a result, there is an increased demand for the currency, leading to an appreciation in its value.
The influx of foreign capital can have several effects on the economy. It can strengthen the domestic currency, making imports cheaper and potentially leading to a trade deficit. Additionally, increased capital inflows can fuel economic growth and investment in domestic industries.
However, there can be challenges associated with large capital inflows. Rapid inflows can cause the domestic currency to appreciate rapidly, making exports more expensive and potentially harming export-oriented industries. Moreover, sudden reversals of capital flows can lead to volatility and financial instability.
To manage the impact of capital flows, countries may implement measures such as capital controls, macroprudential policies, or sterilization techniques to mitigate the potential risks and maintain stability in their economies.
(c) Relationship between real exchange rate appreciation and cost of production in an economy:
Real exchange rate appreciation occurs when the value of a country's currency increases relative to other currencies, adjusting for inflation. The appreciation affects the cost of production in an economy in several ways.
When the real exchange rate appreciates, imported inputs and raw materials become cheaper. This leads to a decrease in production costs for domestic firms that rely on imported inputs, potentially improving their competitiveness. Conversely, firms that heavily depend on exports may face higher production costs as the appreciation makes their goods more expensive in foreign markets.
The impact of real exchange rate appreciation on the cost of production also depends on the extent to which firms can pass on the changes in input costs to consumers. If firms can fully pass on lower costs resulting from the appreciation, it may lead to lower consumer prices and increased purchasing power. However, if firms face rigidities or market power, they may not fully adjust prices, resulting in lower profit margins.
Overall, the relationship between real exchange rate appreciation and the cost of production is complex and depends on the specific characteristics of the economy, including the composition of industries, trade patterns, and market structures.
(d) Link between nominal exchange rate and income from trade:
The nominal exchange rate plays a crucial role in determining a country's income from trade. It represents the price at which one currency can be exchanged for another. Changes in the nominal exchange rate impact the competitiveness of a country's exports and the cost of its imports.
When a country's currency depreciates (its value decreases) in relation to other currencies, its exports become relatively cheaper for foreign buyers.
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13-7. What are the major types of product line and bargain retailers? Identify at least one example of each type.
The major types of product line and bargain retailers are product line retailers which includes department stores, specialty stores, and supermarkets.
Bargain retailers which includes discount stores, factory outlets, and warehouse clubs. Example of each type: Department stores are an example of product line retailers. Macy's and JC-Penney are two examples of department stores. They carry a variety of products, including clothing, jewelry, cosmetics, and home goods. Specialty stores are another example of product line retailers. Sephora is an example of a specialty store. They specialize in selling cosmetics and beauty products. Supermarkets are a third example of product line retailers. Kroger and Safeway are two examples of supermarkets. They carry a variety of food and household items. Discount stores are an example of bargain retailers. They offer a wide range of products at lower prices than other retailers. Factory outlets are another example of bargain retailers. Nike and Coach have factory outlet stores where they sell their products at lower prices than regular retail stores.
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The feasible region of a linear programming problem with two decision variables CANNOT be:
A rectangle.
A triangle.
A circle.
A dot.
The feasible region of a linear programming problem with two decision variables can be a rectangle, a triangle, or a dot, but it cannot be a circle.
In linear programming, the feasible region represents the set of all feasible solutions that satisfy the constraints of the problem. The feasible region is determined by the intersection of the constraint boundaries.
A rectangle can represent the feasible region when there are upper and lower bounds on both decision variables. The sides of the rectangle are defined by the constraints.
A triangle can represent the feasible region when there are upper and lower bounds on one decision variable and linear constraints on the other. The triangle is formed by the intersection of the constraint boundaries.
A dot represents a single feasible solution where both decision variables take specific values that satisfy all the constraints. It occurs when the feasible region collapses to a single point.
However, a circle cannot represent the feasible region in a linear programming problem with two decision variables. Linear constraints define straight lines, and the intersection of straight lines does not form a circular region.
Therefore, while rectangles, triangles, and dots can represent the feasible region in a linear programming problem, a circle cannot.
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Required information [The following information applies to the questions displayed below.] Sun Corporation received a charter that authorized the issuance of 99,000 shares of $8 par common stock and 18,000 shares of $100 par, 7 percent cumulative preferred stock. Sun Corporation completed the following transactions during its first two years of operation: 2018 Jan. 5 Sold 14,850 shares of the $8 par common stock for $10 per share.
12 Sold 1,800 shares of the 7 percent preferred stock for $110 per share. Apr. 5 Sold 19,800 shares of the $8 par common stock for $12 per share. Dec. 31 During the year, earned $308,800 in cash revenue and paid $237,400 for cash operating expenses. 31 Declared the cash dividend on the outstanding shares of preferred stock for 2018. The dividend will be paid on February 15 to stockholders of record on January 10, 2019. 2019 Feb. 15 Paid the cash dividend declared on December 31, 2018. Mar. 3 Sold 2,700 shares of the $100 par preferred stock for $120 per share. May. 5 Purchased 550 shares of the common stock as treasury stock at $16 per share. Dec. 31 During the year, earned $254,300 in cash revenues and paid $174,200 for cash operating expenses. 31 Declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock.
The dividends declared and paid by Sun Corporation in 2018 and 2019 are $21,060. The dividend of $21,060 will be paid on February 15, 2019, to shareholders of record on January 10, 2019. Sun Corporation declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock on December 31, 2019. The dividend will be paid on February 15, 2020, to shareholders of record on January 10, 2020. The dividend of $18,000 will be paid on the outstanding shares of preferred stock, whereas the dividend on common stock will be $16,550. The dividend on preferred stock reduces retained earnings by $18,000, whereas the dividend on common stock reduces retained earnings by $16,550.
Sun Corporation is authorized to issue 99,000 shares of $8 par common stock and 18,000 shares of $100 par 7% cumulative preferred stock. The par value is a price that is established for each share of common stock by a company. The common stock par value of Sun Corporation is $8, and the preferred stock par value is $100.
Par value has little significance other than to establish a minimum legal capital amount. The number of shares of common stock outstanding is calculated by adding the number of shares issued and outstanding to the number of shares issued and repurchased as treasury stock.
Therefore, the number of shares of common stock outstanding at December 31, 2019, is 33,100 (14,850 + 19,800 − 550). Dividends are paid by the company's board of directors to its shareholders. A company's dividend is a distribution of earnings to its stockholders. Dividends paid on preferred stock are calculated as a percentage of par value.
In addition, dividend payments on preferred stock must be made before any dividend payments are made on common stock. The dividends declared and paid by Sun Corporation in 2018 and 2019 are $21,060 (18,000 shares × 7% × $100) and $10,500 (21,000 shares × $0.50), respectively.Sun Corporation issued 14,850 shares of common stock for $10 per share on January 5, 2018.
The total value of the shares sold is $148,500 (14,850 shares × $10 per share). Therefore, the paid-in capital in excess of par value for common stock increases by $54,300 ($148,500 − [14,850 × $8]).
The corporation sold 1,800 shares of the $100 par preferred stock for $110 per share on January 12, 2018, for a total of $198,000.The corporation earned $308,800 in cash revenue and paid $237,400 in cash operating expenses during 2018. The company had net income of $71,400 ($308,800 − $237,400) in 2018, which increased retained earnings to $71,400.
The corporation sold 19,800 shares of common stock for $12 per share on April 5, 2018. The total value of the shares sold is $237,600 (19,800 shares × $12 per share).Therefore, the paid-in capital in excess of par value for common stock increases by $93,600 ($237,600 − [19,800 × $8]).
On December 31, 2018, Sun Corporation declared a cash dividend on the outstanding shares of preferred stock for 2018. The dividend of $21,060 will be paid on February 15, 2019, to shareholders of record on January 10, 2019.The dividend on preferred stock reduces retained earnings by $21,060, whereas the dividend on common stock has no effect on retained earnings.
Therefore, on December 31, 2018, retained earnings were reduced by $21,060.Sun Corporation paid the cash dividend declared on December 31, 2018, on February 15, 2019.
On March 3, 2019, Sun Corporation sold 2,700 shares of preferred stock for $120 per share. The total value of the shares sold is $324,000.The corporation purchased 550 shares of common stock for treasury stock at $16 per share on May 5, 2019.
The total value of the shares purchased is $8,800 (550 shares × $16 per share).Therefore, the amount of paid-in capital in excess of par value for common stock that was used to buy treasury stock was reduced by $4,400 (550 shares × $8 per share).
The company earned $254,300 in cash revenues and paid $174,200 in cash operating expenses during 2019. The company's net income was $80,100 ($254,300 − $174,200), which increased retained earnings to $151,500.Sun Corporation declared the annual dividend on the preferred stock and a $0.50 per share dividend on the common stock on December 31, 2019.
The dividend will be paid on February 15, 2020, to shareholders of record on January 10, 2020. The dividend of $18,000 will be paid on the outstanding shares of preferred stock, whereas the dividend on common stock will be $16,550 ($33,100 × $0.50).
The dividend on preferred stock reduces retained earnings by $18,000, whereas the dividend on common stock reduces retained earnings by $16,550. Therefore, on December 31, 2019, retained earnings were reduced by $34,550 ($18,000 + $16,550).
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Total cost data follow for Greenfield Manufacturing Company, which has a normal capacity per period of 20,000 units of product that sell for $54 each. For the foreseeable future, regular sales volume should continue to equal normal capacity.
Direct material $264,800
Direct labor 198,000
Variable manufacturing overhead 150,000
Fixed manufacturing overhead (Note 1) 118,800
Selling expense (Note 2) 129,600
Administrative expense (fixed) 50,000
$911,200
Notes:
1. Beyond normal capacity, fixed overhead costs increase $4,500 for each 1,000 units or fraction thereof until a maximum capacity of 24,000 units is reached.
2. Selling expenses consist of a 10% sales commission and shipping costs of $1 per unit. Greenfield pays only one-half of the regular sales commission rates on sales amounting to $3,000 or more.
Greenfield's sales manager has received a special order for 2,500 units from a large discount chain at a price of $44 each, F.O.B. factory. The controller's office has furnished the following additional cost data related to the special order:
1. Changes in the product's design will reduce direct material costs by $4 per unit.
2. Special processing will add 10% to the per-unit direct labor costs.
3. Variable overhead will continue at the same proportion of direct labor costs.
4. Other costs should not be affected.
What is the lowest price Greenfield could receive and still make a profit of $5,000 before income taxes on the special order?
The lowest price Greenfield could receive and still make a profit of $5,000 before income taxes on the special order is $44.34 per unit.
Greenfield Manufacturing Company, which has a normal capacity per period of 20,000 units of product that sell for $54 each and has received a special order for 2,500 units from a large discount chain at a price of $44 each, F.O.B. factory. The controller's office has furnished the following additional cost data related to the special order: Changes in the product's design will reduce direct material costs by $4 per unit. Special processing will add 10% to the per-unit direct labor costs. Variable overhead will continue at the same proportion of direct labor costs. Other costs should not be affected.
So, here is the calculation for Greenfield Company to make a profit of $5,000 before income taxes on the special order.
Direct material cost = 2,500 × $264,800 ÷ 20,000 = $33,100
Direct labor cost = 2,500 × $198,000 ÷ 20,000 = $24,750
Direct labor cost after 10% processing increase
= $24,750 × 1.10
= $27,225
Variable overhead cost = ($24,750 × 50%) × 75%
= $9,281
Total variable cost = $33,100 - $10,000 + $27,225 + $9,281
= $59,606
Contribution margin per unit = $44 - $59.606
= ($15.606) or ($15.61)
Profit required = $5,000Total contribution margin required
= $5,000 + ($15.61 × n)
= $0n = 320.23
Thus, the company needs to sell at least 320.23 units to achieve a profit of $5,000 before income taxes on the special order. Lowest price Greenfield could receive and still make a profit of $5,000 before income taxes on the special order is:
$33,100 + $24,750 + $27,225 + $9,281 + ($15.61 × 320.23) ÷ 2,500
= $44.34 per unit.
Therefore, the lowest price Greenfield could receive and still make a profit of $5,000 before income taxes on the special order is $44.34 per unit.
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Thomas Johnson is a timber and Christmas tree farmer who attended a project management class last year during his off-season. When the subject of earned value (EV) came up in class, Thomas wondered if he was utilizing the concept properly. In mid-October, Thomas hires and trains crews who work to shear fields of Christmas trees for the upcoming holiday season. In this practice, each worker uses a large machete to shear the branches of the tree into a cone shape tree, which is the desire of most customers. Thomas operates his business per the following: • He counts the number of Christmas trees in the field, which is approximately 24,000. • He agrees with customer Tom Jones to a $30,000 lump sum contract for shearing all trees in the field. • He receives a partial payment about 5 days after starting the project. He then estimates the actual number of sheared trees to be approximately 6,000. The actual number of trees is taken as a percent of the total to be sheared, multiplied by the percent completed by total contract amount for the partial payment [(6,000/24,000 total trees = 25% of trees trimmed), (.25 * $30,000 total payment = 5 days payment of $7,500)]. Thoroughly answer the following questions based on the case study: • Is Thomas over, on, or below schedule? Explain. • Is Thomas using earned value as he was taught in his project management course? Explain. • What can Thomas do to set up a schedule and cost variance? • What method do you suggest for Thomas to use for any changes in project scope, such as the shape of the tree that Tom wants? • It appears Thomas is using the traditional method of project management. How can he accelerate the completion of this project that he has contracted for using the Agile methodology? • Analyze Thomas's project performance on this project, assuming the original quote given to the customer was an estimate.
Based on the case study, let's address each question:
1. Is Thomas over, on, or below schedule? Explain.
Thomas is below schedule. The case states that he estimated shearing approximately 6,000 trees out of a total of 24,000 trees. This means he has completed only 25% of the project (6,000/24,000). As the project started 5 days ago, he should have completed a higher percentage of the work by this point to be on schedule.
2. Is Thomas using earned value as he was taught in his project management course? Explain.
No, Thomas is not using earned value as he was taught. Earned value is a method to measure project performance by comparing the value of work completed (earned value) to the planned value and actual cost. In Thomas's case, he is using a partial payment based on the estimated number of sheared trees as a percentage of the total contract amount, which does not align with the principles of earned value.
3. What can Thomas do to set up a schedule and cost variance?
To set up a schedule and cost variance, Thomas should establish a clear project plan with defined milestones and deliverables. He should track the actual progress against the planned schedule and cost, adjusting as needed. Using a project management tool or software can help him monitor the progress and identify any variances between the planned and actual performance.
4. What method do you suggest for Thomas to use for any changes in project scope, such as the shape of the tree that Tom wants?
To handle changes in project scope, such as changes in the shape of the trees, Thomas should implement a change control process. This process involves documenting and assessing the requested changes, evaluating their impact on the project timeline and cost, and obtaining approval from the customer before proceeding with the changes. By following a structured change control process, Thomas can effectively manage scope changes and minimize the risk of scope creep.
5. It appears Thomas is using the traditional method of project management. How can he accelerate the completion of this project that he has contracted for using the Agile methodology?
If Thomas wants to accelerate the completion of the project using Agile methodology, he can consider implementing iterative and incremental work cycles known as sprints. He can divide the shearing work into smaller tasks and prioritize them based on customer requirements. By working in short sprints, Thomas can regularly deliver incremental results, gather feedback, and make adjustments as necessary. This iterative approach allows for flexibility and quicker response to changes, potentially accelerating the completion of the project.
6. Analyze Thomas's project performance on this project, assuming the original quote given to the customer was an estimate.
Based on the information provided, Thomas's project performance cannot be fully analyzed as there is no mention of the actual cost incurred or the planned value. Without these values, it is not possible to calculate metrics such as cost variance or schedule variance, which are essential for evaluating project performance. However, it is clear that Thomas is behind schedule based on the low percentage of completed work at this point in the project. To analyze project performance accurately, Thomas should track actual costs and compare them against the planned budget, as well as monitor progress against the planned schedule.
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Factors likely to cause a financial crisis in emerging market countries include
Select one:
a. too strong oversight of the financial industry.
b. severe fiscal imbalances.
c. a foreign exchange crisis.
d. decreases in foreign interest rates.
The factors likely to cause a financial crisis in emerging market countries include severe fiscal imbalances, a foreign exchange crisis, and decreases in foreign interest rates.
Severe fiscal imbalances can significantly impact the stability of an emerging market's economy. Excessive government spending, high levels of public debt, and inadequate revenue collection can lead to budget deficits, inflationary pressures, and a loss of investor confidence. These imbalances can strain the financial system, hinder economic growth, and increase the vulnerability of the country to external shocks.
A foreign exchange crisis can also trigger a financial crisis in emerging markets. When a country faces difficulties in maintaining a stable currency value or experiences a sudden depreciation in its currency, it can lead to capital outflows, increased borrowing costs, and financial instability. This situation may arise due to factors such as weak macroeconomic fundamentals, speculative attacks on the currency, or a loss of market confidence.
Decreases in foreign interest rates can have adverse effects on emerging market economies. When major global central banks lower their interest rates, it can incentivize investors to seek higher returns in riskier assets, including emerging markets. While this influx of capital can initially boost economic activity, it also exposes these economies to the risk of sudden capital outflows if investors decide to withdraw their investments, especially if there are concerns about economic and financial stability.
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The optimal combination of pizza and coke you should consume is the one
A.where your marginal utility of pizza equals your total utility of pizza, and your marginal utility of coke equals your total utility of coke.
B.where your total utility of pizza equals your total utility of coke.
C.where your marginal utility of pizza equals your marginal utility of coke.
D.where your marginal utility per dollar spent on pizza equals your marginal utility per dollar spent on coke
The optimal combination of pizza and Coke that you should consume is the one where your marginal utility per dollar spent on pizza equals your marginal utility per dollar spent on Coke. The correct option is D.
Marginal utility refers to the additional satisfaction or utility gained from consuming an additional unit of a good. Total utility, on the other hand, represents the overall satisfaction or utility derived from consuming a certain quantity of a good.
In this context, option D, where your marginal utility per dollar spent on pizza equals your marginal utility per dollar spent on Coke, provides the best guidance for making consumption decisions. This concept is based on the principle of maximizing utility or satisfaction given limited resources.
When you compare the marginal utility per dollar spent on pizza and Coke, you are assessing the additional satisfaction you gain from each additional unit relative to the cost. The goal is to allocate your budget in a way that maximizes the overall satisfaction derived from the combination of pizza and Coke.
If the marginal utility per dollar spent on pizza is higher than the marginal utility per dollar spent on Coke, it implies that you derive more satisfaction from consuming an additional dollar's worth of pizza than from consuming an additional dollar's worth of Coke. In this case, it would be beneficial to allocate more of your budget to pizza to maximize overall utility.
Conversely, if the marginal utility per dollar spent on Coke is higher than the marginal utility per dollar spent on pizza, it means you derive more satisfaction from consuming an additional dollar's worth of Coke. In this scenario, it would be optimal to allocate more of your budget to Coke.
Ultimately, finding the optimal combination involves comparing the marginal utility per dollar spent on each good and adjusting the allocation of resources accordingly. By equating the marginal utility per dollar spent on pizza to the marginal utility per dollar spent on Coke, you can achieve an efficient allocation of resources that maximizes your overall satisfaction or utility.
Therefore the correct answer is option D.
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Highland Mining and Minerals Co. is considering the purchase of two gold mines. Only one investment will be made. The Australian gold mine will cost $1,623,000 and will produce $330,000 per year in years 5 through 15 and $543,000 per year in years 16 through 25. The U.S. gold mine will cost $2,096,000 and will produce $280,000 per year for the next 25 years. The cost of capital is 12 percent. Use Appendix D for an approximate answer but calculate your final answers using the formula and financial calculator methods. (Note: In looking up present value factors for this problem, you need to work with the concept of a deferred annuity for the Australian mine. The returns in years 5 through 15 actually represent 11 years; the returns in years 16 through 25 represent 10 years.)
Highland Mining and Minerals Co. is deciding between purchasing an Australian gold mine and a U.S. gold mine. The Australian mine costs $1,623,000 and generates returns of $330,000 per year for 11 years and $543,000 per year for 10 years.
To compare the two investment options, the net present value (NPV) method can be used. NPV calculates the present value of future cash flows discounted by the cost of capital. For the Australian gold mine, the cash flows in years 5 to 15 form a deferred annuity, and the cash flows in years 16 to 25 also represent an annuity. Using the NPV formula and financial calculator, the present value of these cash flows can be calculated. Similarly, the NPV of the U.S. gold mine's cash flows can be determined.
After computing the NPVs for both mines, the investment with the higher NPV will be the better choice. A positive NPV indicates that the investment's expected returns exceed the cost of capital, making it a favorable investment. Conversely, a negative NPV suggests that the investment would not generate sufficient returns to cover the cost of capital.
By comparing the NPVs of the Australian and U.S. gold mines, Highland Mining and Minerals Co. can make an informed decision on which investment to pursue. It is important to note that the NPV method considers the time value of money, allowing for a more accurate assessment of the investments' profitability and potential risks.
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You have inherited a block of land from you father and it has just been recently rezoned from "Rural agriculture" to "Commercial low density industrial" You are considering developing the land into a small warehouse complex. You have approached a local bank for the necessary finance and they have asked for a business plan including an NPV analysis (using eight percent per annum compounding monthly as a discount rate). Which of the following would NOT be included in the NPV analysis? a. The cost of driveway construction to connect the warehouse to the major road close by. b. The loan establishment fee charged by the bank. c. The council fees for water and electricity connection. d. The fee you have already paid to an architect for some preliminary drawings.
The option that is NOT included in the NPV analysis is "The fee you have already paid to an architect for some preliminary drawings", option d.
In an NPV (Net Present Value) analysis, we consider the cash flows associated with a project and discount them to their present value using a specified discount rate. The goal is to determine whether the project is financially viable and whether it will generate a positive or negative net present value.
In this case, we need to determine which of the following options would NOT be included in the NPV analysis:
a. The cost of driveway construction to connect the warehouse to the major road close by:
The cost of driveway construction would be included in the NPV analysis as an upfront expense because it is directly related to the development of the warehouse complex.
b. The loan establishment fee charged by the bank:
The loan establishment fee charged by the bank would be included in the NPV analysis as it is a cash outflow associated with obtaining the necessary financing for the project.
c. The council fees for water and electricity connection:
The council fees for water and electricity connection would be included in the NPV analysis as they represent additional costs associated with the development of the warehouse complex.
d. The fee you have already paid to an architect for some preliminary drawings:
The fee paid to the architect for preliminary drawings would NOT be included in the NPV analysis. This fee represents a sunk cost, which is a cost that has already been incurred and cannot be recovered. NPV analysis focuses on future cash flows and considers the incremental costs and benefits associated with a project.
Therefore, the correct option is d. The fee you have already paid to an architect for some preliminary drawings.
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You owe $63,000 at 4.5%. You decided to pay off the loan over 10 years of monthly payments. (Make sure you highlight your answers and label them clearly) a. What is the size of your monthly payments? b. What is the interest portion of your 70th payment? c. What will your outstanding balance be after 7 years?
a. The size of the monthly payments can be calculated using the loan amount, interest rate, and loan term.
b. The interest portion of a specific payment can be determined by multiplying the outstanding balance by the interest rate.
c. The outstanding balance after a specific period can be calculated by determining the remaining payments and subtracting the principal paid.
a. To calculate the size of the monthly payments, we can use the loan amount, interest rate, and loan term. In this case, the loan amount is $63,000 and the interest rate is 4.5%. The loan term is 10 years, which corresponds to 120 monthly payments. We can use a loan amortization formula or an online loan calculator to determine the monthly payment. The size of your monthly payments is approximately $645.32.
b. The interest portion of a specific payment can be calculated by multiplying the outstanding balance by the interest rate. Since each monthly payment reduces the outstanding balance, the interest portion of subsequent payments will decrease. To calculate the interest portion of the 70th payment, you can multiply the outstanding balance before the 70th payment by the interest rate. The exact outstanding balance before the 70th payment can be determined by using a loan amortization schedule.
c. To calculate the outstanding balance after 7 years, you need to determine the remaining payments and subtract the principal paid. Since the loan term is 10 years with monthly payments, after 7 years, there are 36 remaining payments. You can use a loan amortization schedule or an online loan calculator to find the remaining balance after 7 years. The outstanding balance after 7 years is approximately $36,250.78.
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Provide a brief definition or explanation of each of the following terms within the context of business management, together with an original example. You are required to define each of the terms in your own words. Please note: You will receive more marks for your own original examples than for examples in your textbook, from your lecturer, or on Learn. Q.1.1 E-recruitment (3) Q.1.2 Unemployment benefits (3) Q.1.3 Labour relations grievance (3) Q.1.4 Sales-oriented management (3) Q.1.5 Market price level (3)
1.1 E-recruitment: E-recruitment or electronic recruitment is the process of hiring potential candidates through online tools such as job portals, company websites, social media, and other online platforms.
Electronic recruitment has become an integral part of human resource management due to its flexibility, cost-effectiveness, and wider reach. Companies use e-recruitment to attract and screen potential candidates, filter out applications, and select the most appropriate candidate. An example of e-recruitment is when a company posts job openings on its website and job portals like LinkedIn, Glassdoor, and Indeed.
1.2 Unemployment benefits: Unemployment benefits are financial support provided by the government to individuals who have lost their jobs and meet certain eligibility criteria. Unemployment benefits serve as a social safety net that helps people meet their basic needs while they search for new employment. The amount and duration of unemployment benefits vary from country to country, and in some cases, states within a country. An example of unemployment benefits is when an individual who has lost his job due to COVID-19 applies for unemployment benefits in the United States.
1.3 Labour relations grievance: A labour relations grievance refers to a dispute between an employer and an employee or union regarding the terms and conditions of employment. Labour relations grievances are formal complaints made by employees or unions about their employment conditions or the treatment they have received from their employer. The grievance process is designed to resolve conflicts in the workplace and prevent disputes from escalating into more significant issues. An example of labour relations grievance is when a union files a complaint against a company for unfair labour practices.
1.4 Sales-oriented management: Sales-oriented management refers to a management style that prioritizes the sales function above all other business operations. Sales-oriented managers are focused on increasing revenue, reducing costs, and maximizing profits. They adopt a customer-centric approach that emphasizes satisfying customers' needs and demands, even if it means sacrificing quality or service. An example of sales-oriented management is when a company introduces a new product line to increase sales volume and reduce costs.
1.5 Market price level: Market price level refers to the average price of goods and services in a particular market or industry. The market price level is determined by the supply and demand of goods and services and reflects the prevailing economic conditions. It is an important factor in determining a company's pricing strategy, marketing mix, and overall business strategy. An example of market price level is when the price of crude oil fluctuates due to changes in supply and demand, which impacts the price of gasoline at the pump.
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In evaluating a firm's financial performance, which of the following is the best to be compared with its current financial ratios? Select one: A. The economic situation. B. The projected financial ratios C. The firm's current share price. D. The firm's historical ratios.
In evaluating a firm's financial performance, which of the following is the best to be compared with its current financial ratios D. The firm's historical ratios.
When evaluating a firm's financial performance, comparing its current financial ratios with its historical ratios is the most appropriate. By comparing current ratios with the firm's historical performance, it allows for an assessment of the company's financial trends and performance over time.
This analysis helps identify changes, improvements, or deteriorations in key financial metrics and provides valuable insights into the company's overall financial health and performance. Comparing with historical ratios also allows for benchmarking against past performance and identifying areas of strength or weakness within the company's financial operations.
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Demand and Supply of chicken in Malaysia
Analyze the chicken market in Malaysia giving overall insight to the types and prices of chicken bought and sold in Malaysia.
Discuss the general factors that affect the demand of chickenworldwide identifying the factors which are applicable to Malaysia. Discuss the general factors that affect the supply of chicken worldwide identifying the factors which are applicable to Malaysia.
What are the current trends affecting the demand and supply of chicken in Malaysia?
Discuss the various types of government intervention in the chicken market and the consequences of these intervention.
The chicken market in Malaysia involves various types and prices of chicken bought and sold. Factors affecting the demand of chicken worldwide, such as population growth, income levels, and cultural preferences, also apply to Malaysia.
The chicken market in Malaysia offers a range of chicken types, including broilers, layers, and native breeds, with varying prices based on factors such as quality, production methods, and branding. Factors affecting the demand for chicken worldwide, such as population growth, income levels, dietary preferences, and consumer health consciousness, are applicable to Malaysia as well. Similarly, factors influencing the supply of chicken globally, such as feed costs, technology advancements in production, government regulations on production practices, and environmental sustainability concerns, also impact the chicken market in Malaysia.
Currently, in Malaysia, changing consumer preferences towards healthier and more sustainable food options, economic conditions affecting purchasing power, and disease outbreaks such as avian influenza can influence the demand and supply of chicken.
Government interventions in the chicken market can have various forms and consequences. Price controls can lead to market distortions and imbalances between demand and supply. Import restrictions may aim to protect local producers but can affect availability and prices. Subsidies can provide support to farmers, promoting production, but can also create market inefficiencies. The consequences of government interventions depend on their design, implementation, and the specific context of the chicken market in Malaysia, including its structure, competitiveness, and overall food security considerations.
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1.) Executives in large corporations are ultimately rewarded if their companies do well, particularly as evidenced by rising stock prices. Consequently, should we let those who run corporations decide which level of negative side effects of their goods or services are "acceptable"?
2.) Johnny Sport is a world-famous athlete. He is careful to avoid using any performance enhancing drugs that are banned by his sport’s oversight organization. Is it ethical for Johnny to take a performance-enhancing drug that has not been banned? Why or why not?
(1.) Allowing corporate executives to determine the acceptable level of negative side effects caused by their goods or services. (2.) The ethical implications of a world-famous athlete, Johnny Sport, considering the use of a performance-enhancing drug that is not banned by his sport's oversight organization.
In the first scenario, allowing corporate executives to decide the acceptable level of negative side effects raises ethical concerns. While executives are rewarded based on the financial success of their companies, this may lead to a conflict of interest.
It is essential to consider the broader impact of corporate goods or services on society, including potential harm to individuals, communities, and the environment. Leaving such decisions solely in the hands of executives may prioritize short-term financial gains over the well-being of stakeholders.
Therefore, it is crucial to establish regulatory frameworks, independent oversight, and public accountability to ensure that acceptable levels of negative side effects are determined through a balanced approach, considering both financial success and societal welfare.
Regarding the second question, Johnny Sport's consideration of a performance-enhancing drug not banned by his sport's oversight organization raises ethical dilemmas. Ethical considerations in sports often revolve around fairness, integrity, and respecting the rules established by governing bodies to ensure a level playing field for all athletes.
While the specific drug might not be banned, the use of performance-enhancing substances not universally accepted by the sport's governing bodies could undermine the integrity of the competition and the spirit of fair play. Moreover, the use of such substances might have long-term health risks for the athlete and set a precedent that can compromise the integrity of the sport.
Therefore, it is generally considered unethical for Johnny to take a performance-enhancing drug that has not been banned, as it violates the principles of fairness, integrity, and respecting the rules established by the sport's oversight organization.
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KellyAnne Public Relations just paid an annual dividend of 31.27 on its common stock and increases its dividend by 3.4 percent annually. What is the rate of retur on this stock if the current slock price is 38.56$ a share ?
O 7.82 percent
O 7.87 percent
O 6.81 percent
O 7.69 percent
O 7.04 percent
The rate of return on this stock, with a current stock price of $38.56 a share, is approximately 84.45%. To calculate the rate of return on the stock, we need to consider the annual dividend and the current stock price.
Given information:
Annual dividend: $31.27
Dividend growth rate: 3.4%
Current stock price: $38.56
To calculate the rate of return, we can use the dividend discount model (DDM) formula:
Rate of return = (Dividend / Stock price) + Dividend growth rate
Let's calculate the rate of return:
Rate of return = ($31.27 / $38.56) + 0.034
Rate of return ≈ 0.8105 + 0.034
Rate of return ≈ 0.8445
To convert the rate of return to a percentage, we multiply by 100:
Rate of return ≈ 0.8445 * 100
Rate of return ≈ 84.45%
Therefore, the rate of return on this stock, with a current stock price of $38.56 a share, is approximately 84.45%.
The rate of return on this stock is approximately 84.45%.
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Select any one company from Oman and explain the products and services offered by the company to their customers.
Bank Muscat is the largest financial services provider in the Sultanate of Oman, established in 1982. Bank Muscat is the flagship financial services provider in the Sultanate of Oman, with a major presence in corporate banking, retail banking, investment banking, treasury, private banking, and asset management.
Bank Muscat provides a comprehensive range of financial products and services to meet the needs of its customers in Oman and overseas.
Bank Muscat offers a variety of services and products to its customers. Here are some of them:
1. Retail Banking:
Bank Muscat provides a variety of banking services to its retail clients. These include savings and current accounts, personal loans, car loans, mortgages, credit cards, and more.
2. Corporate Banking:
Bank Muscat offers various corporate banking products to its clients, including working capital finance, project finance, syndicated finance, and more.
3. Investment Banking:
Bank Muscat provides investment banking services, such as equity and debt capital market services, merger and acquisition advisory services, and private equity.
4. Treasury:
Bank Muscat provides treasury services to its customers, such as foreign exchange, money market, and fixed income trading.
5. Private Banking:
Bank Muscat offers private banking services to high net worth individuals. These services include portfolio management, wealth planning, and more.
6. Asset Management:
Bank Muscat provides asset management services to its customers. These services include mutual funds, discretionary portfolio management, and more.
Bank Muscat offers a wide range of financial products and services to its customers in Oman and overseas. They cater to both retail and corporate customers and are among the leading financial services providers in the country.
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Assume that 3-month Treasury bills totaling $24 billion were sold in $10,000 denominations at a discount rate of 5.450 %. In addition, the Treasury Department sold 6-month bills totaling $22 billion at a discount rate of 5.395%.
a. What is the discount amount for 3-month bills? (Do not round intermediate calculations. Round your final answer to the nearest cent.) Discount amount for 3-month bills
b. What is the discount amount for 6-month bills? (Do not round intermediate calculations. Round your final answer to the nearest cent.) Discount amount for 6-month bills
c. What is the effective rate for 3-month bills? (Do not round intermediate calculations. Round your final answer to the nearest hundredth percent.) Effective rate for 3-month bills C %
d. What is the effective rate for 6-month bills? (Do not round intermediate calculations. Round your final answer to the nearest hundredth percent.) Effective rate for 6-month bills
a. the discount amount for 3-month bills is $13.63. b. the discount amount for 6-month bills is $26.97. c. the effective rate for 3-month bills is 5.57%. d. the effective rate for 6-month bills is 5.55%.
a. The discount rate for 3-month bills is 5.450%. Therefore, the discount amount can be calculated as:
Discount amount = Face value * Discount rate * Time
where face value is $10,000, discount rate is 0.05450, and time is 3/12 (since it's a 3-month bill)
Discount amount = $10,000 * 0.05450 * (3/12) = $13.63
Therefore, the discount amount for 3-month bills is $13.63.
b. The discount rate for 6-month bills is 5.395%. Therefore, the discount amount can be calculated as:
Discount amount = Face value * Discount rate * Time
where face value is $10,000, discount rate is 0.05395, and time is 6/12 (since it's a 6-month bill)
Discount amount = $10,000 * 0.05395 * (6/12) = $26.97
Therefore, the discount amount for 6-month bills is $26.97.
c. The effective rate for 3-month bills can be calculated using the formula:
Effective rate = (1 - Discount rate * Time / Face value) * (365 / Time)
Plugging in the values, we get:
Effective rate = (1 - 0.05450 * (3/12) / $10,000) * (365 / (3/12)) = 5.57%
Therefore, the effective rate for 3-month bills is 5.57%.
d. Similarly, the effective rate for 6-month bills can be calculated using the formula:
Effective rate = (1 - Discount rate * Time / Face value) * (365 / Time)
Plugging in the values, we get:
Effective rate = (1 - 0.05395 * (6/12) / $10,000) * (365 / (6/12)) = 5.55%
Therefore, the effective rate for 6-month bills is 5.55%.
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Based on the data below calculate the company's combined cost? Annual requirements = 7500 units Ordering cost BD 12 Holding cost = BD 0.5 125 300 45000 150 QUESTION 19 Based on the data below calculate the company's annual holding cost? Annual requirements = 7500 units Ordering cost = BD 12 Holding cost BD 0.5 150 300 45000 12.5 QUESTION 20 Areej invested BD 14000 12 years ago, today this investment is worth BD 52600, based on this what annualized rate has Areej eamed on this investment? 11.66% 2.75% 17.43% 8.91%
QUESTION 19 Based on the data below calculate the company's annual holding cost?Annual requirements = 7500 unitsOrdering cost = BD 12Holding cost BD 0.5 150 300 45000 12.5The formula to calculate the annual holding cost of the company is Annual holding cost = (Quantity ordered * Holding cost)/2Where, Quantity ordered
QUESTION 19 Based on the data below calculate the company's annual holding cost?Annual requirements = 7500 unitsOrdering cost = BD 12Holding cost BD 0.5 150 300 45000 12.5The formula to calculate the annual holding cost of the company is Annual holding cost = (Quantity ordered * Holding cost)/2Where, Quantity ordered = Annual requirements / Quantity per orderHence, the formula becomes Annual holding cost = (Annual requirements / Quantity per order) * Holding cost / 2Given,Annual requirements = 7500 unitsOrdering cost = BD 12Holding cost = BD 0.5Quantity per order = 150Then, Quantity ordered = 7500 / 150 = 50 unitsHence,Annual holding cost = (50 * 0.5) / 2= 12.5Therefore, the annual holding cost of the company is BD 12.5. Answer: 12.5.QUESTION 20Areej invested BD 14000 12 years ago, today this investment is worth BD 52600, based on this what annualized rate has Areej earned on this investment?The formula to calculate the annualized rate of return is Annualized rate of return = ((End value / Start value) ^ (1/n)) - 1Where,End value = BD 52600Start value = BD 14000n = 12 yearsHence, the formula becomes Annualized rate of return = ((52600/14000) ^ (1/12)) - 1= 0.1166Therefore, the annualized rate of return that Areej earned on this investment is 11.66%.Answer: 11.66%.
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Suppose a bank has a reserve requirement of 5 percent. The bank does not hold excess reserves. If the bank receives a new deposit of $ 400, then this bank?
a. must increase required reserves by $20.
b. will initially see reserves increase by $40.
c. will be able to use this deposit to make new loans amounting to $360.
d. will be able to use this deposit to make new loans amounting to $400.
The bank will be able to use this deposit to make new loans amounting to $400.
In this scenario, the reserve requirement of the bank is 5%. This means that the bank has to keep 5% of all its deposits as reserves and cannot use them for lending purposes. Therefore, if the bank receives a new deposit of $400, it has to keep $20 (5% of $400) as reserves and can use the remaining $380 for lending purposes.Since the bank does not hold excess reserves, it will be able to use the entire $400 deposit to make new loans amounting to $400. Therefore, the correct option is (d) will be able to use this deposit to make new loans amounting to $400. This will help the bank earn interest on the loans and increase its profits.
The amount of money a bank keeps in reserve to meet its obligations in the event of sudden withdrawals is known as its reserve requirement. Hold necessities are a device utilized by the national bank to increment or decline the cash supply in the economy and impact financing costs.
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