Rozanski Co. currently has EBIT of $36,000 and is all equity financed. EBIT are expected to grow at a rate of 3% per year. The firm pays corporate taxes equal to 26% of taxable income. The cost of equity for this firm is 10%.
By using these terms EBIT, growth rate, corporate tax rate, and cost of equity. Let's find the market value of the firm step by step:
1. Calculate the after-tax EBIT (earnings before interest and taxes) by multiplying the EBIT by (1 - corporate tax rate):
After-tax EBIT = $36,000 * (1 - 0.26) = $36,000 * 0.74 = $26,640
2. Determine the perpetuity of the after-tax EBIT by considering the growth rate of 3% per year:
Perpetuity = After-tax EBIT / (Cost of Equity - Growth Rate)
Perpetuity = $26,640 / (0.10 - 0.03) = $26,640 / 0.07 = $380,571.43
The market value of the firm, rounded to two decimal places, is $380,571.43.
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eBook Problem Walk Through Holt Enterprises recently paid a dividend, Do, of $3.50. It expects to have nonconstant growth of 12% for 2 years followed by a constant rate of 6% thereafter . The firm's required return is 10% a. How far away is the horizon date? 1. The terminal, or horizon, date is Year since the value of a common stock is the present value of all future expected dividends at time zero II. The terminal, or horizon, dat is the date when the growth rate becomes nonconstant. This occurs at time zero. 111. The terminal, or hottron, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2 IV. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of your V. The terminal, or horizon, dat is Infinity since common stocks do not have a maturity date Select . What is the firm's horton, of continuino, value? Do not round Intermediate calculations. Round your answer to the nearest $ What is the he's intrinske volion today. Part round intermediate calculations. Round your wwwer to that comest cent
To determine the horizon date, we need to identify when the growth rate becomes constant. We are told that the company will have nonconstant growth of 12% for two years, followed by constant growth of 6%. Therefore, the horizon date is the end of Year 2, when the growth rate becomes constant.
To calculate the horizon value, we need to calculate the dividends for Year 1, Year 2, and all subsequent years. Since the growth rate is nonconstant for the first two years, we need to use the two-stage dividend growth model.
The formula for the two-stage dividend growth model is:
P0 = (D1 / (1 + r)^1) + (D2 / (1 + r)^2) + (D2 * (1 + g2) / (r - g2)) / (1 + r)^2
Where:
P0 = Intrinsic value of the stock today
D1 = Dividend expected in Year 1
D2 = Dividend expected in Year 2
r = Required rate of return
g1 = Growth rate for the first stage (nonconstant growth)
g2 = Growth rate for the second stage (constant growth)
We are given that the current dividend is $3.50, and the growth rate for the first two years is 12%. Therefore:
D1 = $3.50 * (1 + 0.12) = $3.92
D2 = $3.92 * (1 + 0.12) = $4.38
We are also given that the required return is 10%, the growth rate for the second stage is 6%, and the horizon date is the end of Year 2.
Therefore:
r = 10%
g2 = 6%
n = 2
Using these values, we can calculate the horizon, or continuing, value:
Continuing value = D3 * (1 + g2) / (r - g2) = $4.38 * (1 + 0.06) / (0.10 - 0.06) = $139.56
Now we can use the two-stage dividend growth model to calculate the intrinsic value of the stock today:
P0 = (D1 / (1 + r)^1) + (D2 / (1 + r)^2) + (Continuing value / (1 + r)^2)
P0 = ($3.92 / 1.1) + ($4.38 / 1.1^2) + ($139.56 / 1.1^2) = $124.15 (rounded to the nearest dollar)
Therefore, "the intrinsic value of the stock today is $124.00."
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what exclusive organization's membership is invited to become members based on excellence in craftsmanship and other requirements such as number of ateliers (workrooms)?
The exclusive organization's membership that is invited to become members based on excellence in craftsmanship and other requirements such as the number of ateliers (workrooms) is the Meilleurs Ouvriers de France (Best Craftsmen of France).
This organization was founded in 1924 and recognizes exceptional skills and expertise in various crafts, such as cooking, pastry-making, carpentry, jewelry-making, and more. The membership is limited to those who have won the prestigious competition "Un des Meilleurs Ouvriers de France" (One of the Best Craftsmen of France), which is held every four years and requires the contestants to undergo a rigorous selection process and demonstrate their mastery of their craft.
The organization aims to promote and preserve the French tradition of excellence in craftsmanship and to support the development of young craftsmen.
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greg is paid for the number of hours he works or for the number of units he produces, whichever is higher. which form of compensation does greg receive?
Greg receives a form of compensation that is commonly referred to asvariable pay or performance-based pay.
Under this form of compensation, Greg's pay is based on either the number of hours he works or the number of units he produces, whichever is higher. This means that if Greg produces more units than the number of hours he works, he will receive pay based on the number of units he produces. On the other hand, if he works more hours than the number of units he produces, he will receive pay based on the number of hours he works.
Variable pay is often used in industries where productivity is critical, such as manufacturing, construction, and sales. This form of compensation is designed to motivate employees to work more efficiently and to increase their productivity by rewarding them for their performance.
Overall, the use of variable pay can help organizations to align employee performance with business goals and objectives, which can ultimately lead to increased profitability and success.
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a fixed set of characteristics we apply to all members of a group is called (a/n)
A fixed set of characteristics we apply to all members of a group is called a "stereotype."
A stereotype is a simplified and generalized belief about the traits and behaviors of a certain group, where the same characteristics are assigned to all members of that group.
A decent arrangement of qualities that we will generally credit to all gathering individuals is known as a generalization. Preconceptions or beliefs about a group of people based on how they are perceived to belong to that group are called stereotypes. Age, gender, race, ethnicity, religion, profession, or social class are just a few of the many characteristics that can serve as the foundation for these beliefs. Both positive and negative stereotypes are frequently oversimplified, exaggerated, or inaccurate. They can be unsafe on the grounds that they can prompt segregation, bias, and inclination against people dependent exclusively upon their gathering enrollment, as opposed to their singular characteristics and activities.
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These are legal rules governing the behavior of Boards of Directors when it comes to the dividend decision EXCEPT?
a) Dividends may only be paid out of profit both past and present.
b) Dividends per share cannot exceed earnings per share in any given fiscal year.
c) Dividends cannot be paid where the payment will cause the firm to become insolvent.
d) Dividends cannot be paid out of capital.
e) None of the above
(e) None of the above, as all of the rules mentioned in options a) to d) are indeed legal rules governing dividend decisions.
What's legal rules governing the behavior of Boards of DirectorsThe legal rules governing the behavior of Boards of Directors with regard to dividend decisions are aimed at ensuring that dividends are paid only when it is safe and prudent to do so, and that the interests of all shareholders are protected.
These rules are put in place to prevent situations where dividends are paid out of capital or where the payment of dividends can lead to the insolvency of the company.
These rules ensure that dividends are paid only out of profits, both past and present, and that dividends per share do not exceed earnings per share in any given fiscal year.
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QUESTION 4 If you were the CEO of a company and was promised a $10M bonus if net income were to increase by 10% this year. You might:
A. Increase profits by eliminating much of the advertising, reducing expenses, a good long run result for the company and the stockholders B Increase profits by eliminating much of the research and development expenses, a good long run result for the company and stockholders. C. Increase profits by eliminating employee training programa, reducing expenses, a good long run result for the company and stockholders D. You might do a, b, and e, because profits will go up and you will be happy to receive a the bonus E. Hold everything, this reward system is misguided because it encourages reducing expenses now in ways that makes you better off (richer) but have negative impact on the future performance of the company
You might: Hold everything, this reward system is misguided because it encourages reducing expenses now in ways that makes you better off (richer) but have negative impact on the future performance of the company.
So, the correct answer is E.
How to increase net income?As CEO, it is important to focus on long-term growth and sustainability of the company rather than just short-term gains for personal benefit.
By cutting expenses that may impact the company's future success, it could ultimately harm the company and its stakeholders in the long run.
It would be better to explore other ways to increase net income that do not sacrifice the future of the company.
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Cost of exhibition catalogues. A catalogue for each exhibitionwill cost £5,000 to produce. The catalogue for the first exhibitionwill have been paid for in December out of Caroline’s remaining£10,000. The catalogues for the second and third exhibitions will also be paid for one month in advance.Gallery premises costs. Business rates are to be paid monthly; the cost is £750 per month. Electricity costs will average out at £60 per month and Caroline expects to receive a bill for the first three months' electricity in March, and to pay it in April.Wages. Caroline will pay a part time assistant £550 per month.Other expenses. Caroline estimates that a total of £1,000 in other expenses will be paid each month.Drawings. She plans to draw £700 per month in cash.Private view expenses. In each of the three months Caroline will have to spend an estimated £450 on buying in wine and other refreshments for the private view. This figure also includes the cost of hourly-paid waiting staff to take drinks round to guests.Advertising. The initial round of press adverts will appear in December, and the £3,000 cost will be paid for out of Caroline’s remaining £10,000. Each month £400 will be paid for brochures and postage costs to send out to people on the gallery’s mailing list.The bank balance at 1 January 20X4 will be £2,000 after advertising and catalogue costs have been paid for. The advertising and catalogue costs form part of Caroline’s start-up capital.The gallery premises are to be depreciated over 25 years on the straight-line basis, with an assumption of nil residual value.Prepare for Caroline:a budget cash flow statement for the three months of January, February and March 20X4a budget statement of profit or loss for the three months ending 31 March 20X4a budget statement of financial position at 31 March 20X4 and:briefly discuss whether or not you think Caroline’s business is going to be successful, identifying any areas where cash flow might be a problem
Budget cash flow statement:
January:
Inflow: None
Outflow: Business rates (£750), Electricity (£60), Wages (£550), Other expenses (£1,000), Drawings (£700), Private view expenses (£450), Brochures and postage (£400), Catalogue for second exhibition (£5,000)
Total outflow: £8,910
Net cash flow: -£8,910
February:
Inflow: None
Outflow: Business rates (£750), Electricity (£60), Wages (£550), Other expenses (£1,000), Drawings (£700), Private view expenses (£450), Brochures and postage (£400), Catalogue for third exhibition (£5,000)
Total outflow: £8,910
Net cash flow: -£8,910
March:
Inflow: None
Outflow: Business rates (£750), Electricity (£60), Wages (£550), Other expenses (£1,000), Drawings (£700), Private view expenses (£450), Brochures and postage (£400)
Total outflow: £3,910
Net cash flow: -£3,910
Budget statement of profit or loss:
Total revenue: None
Total expenses: Catalogues (£15,000), Business rates (£2,250), Electricity (£180), Wages (£1,650), Other expenses (£3,000), Private view expenses (£1,350), Advertising (£3,000), Brochures and postage (£1,200)
Net loss: £27,630
Budget statement of financial position at 31 March 20X4:
Assets: None
Liabilities: None
Equity: Start-up capital (£20,000), Net loss (£27,630)
Total equity: -£7,630 (Negative)
Caroline’s business appears to be facing cash flow problems. Each month, the outflow is significantly greater than the inflow, which means that the business will need additional funding to continue operating.
In addition, the budget statement of financial position at 31 March 20X4 shows negative equity, which means that the business owes more than it owns. Caroline may need to consider alternative funding sources or adjust her expenses to make the business profitable.
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consider a bond paying a coupon rate of 11.75% per year semiannually when the market interest rate is only 4.7% per half-year. the bond has two years until maturity. a. find the bond's price today and six months from now after the next coupon is paid.
The bond's price six months from now after the next coupon is paid is $1100.63.
To calculate the bond's price, we need to use the bond pricing formula:
Bond Price = [tex]C / (1 + r)^1 + C / (1 + r)^2 + ... + C / (1 + r)^n + F / (1 + r)^n[/tex]
Where:
C = coupon payment
r = market interest rate
n = number of periods
F = face value of the bond
In this case, the coupon rate is 11.75% per year semiannually, which means the coupon payment is:
C = 11.75% * $1000 / 2 = $58.75
The market interest rate is 4.7% per half-year, which means the semiannual rate is:
r = 4.7% / 2 = 0.0235
The number of periods is 2 years or 4 half-years, and the face value is $1000.
Using the formula, we can calculate the bond price today:
Bond Price = [tex]58.75 / (1 + 0.0235)^1 + $58.75 / (1 + 0.0235)^2 + $58.75 / (1 + 0.0235)^3 + $58.75 / (1 + 0.0235)^4 + $1000 / (1 + 0.0235)^4[/tex]
Bond Price = $1137.36
Therefore, the bond's price today is $1137.36.
To calculate the bond's price six months from now after the next coupon is paid, we need to adjust the formula by one period and subtract the coupon payment:
Bond Price (after 6 months) =[tex]$58.75 / (1 + 0.0235)^2 + $58.75 / (1 + 0.0235)^3 + $58.75 / (1 + 0.0235)^4 + $1058.42 / (1 + 0.0235)^4[/tex]
Bond Price (after 6 months) = $1100.63
Therefore, the bond's price six months from now after the next coupon is paid is $1100.63.
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you find a zero coupon bond with a par value of $10,000 and 19 years to maturity. the yield to maturity on this bond is 4.1 percent. assume semiannual compounding periods. what is the dollar price of the bond
The dollar price of a zero coupon bond can be calculated using the present value formula, where the present value is the dollar price of the bond, the future value is the par value of the bond, the interest rate is the yield to maturity, and the number of periods is the total number of compounding periods until maturity.
Using the information given in the question, we know that the par value of the bond is $10,000 and the yield to maturity is 4.1 percent, which is equivalent to 0.041 when expressed as a decimal. The total number of compounding periods until maturity is 19 years multiplied by 2 since we are assuming semiannual compounding periods, which gives us 38 periods.
Using the present value formula, the dollar price of the bond is calculated as follows:
Present value = Future value / (1 + interest rate)^number of periods
Present value = $10,000 / (1 + 0.041/2)^38
Present value = $10,000 / (1.0205)^38
Present value = $10,000 / 1.9668
Present value = $5,075.43
Therefore, the dollar price of the zero coupon bond with a par value of $10,000 and 19 years to maturity and a yield to maturity of 4.1 percent, assuming semiannual compounding periods, is $5,075.43. This means that an investor can purchase the bond for $5,075.43 today and receive the par value of $10,000 at maturity in 19 years.
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a newly implemented system has business units concerned about its performance (the new system). which of the following can the auditor recommend to ease those concerns? the organization should prepare the maintenance manual the organization should develop a baseline and monitor the system's usage the organization should implement the changes users have suggested the organization should define alternate processing procedures
The auditor can recommend implementing a baseline and monitoring the system's usage to ease the business unit's concerns about the new system's performance. Option b is answer.
Establishing a baseline involves measuring the system's current performance, such as response times and resource utilization, to establish a starting point for comparison. By monitoring the system's usage, the organization can identify any performance issues and take corrective actions to address them.
The organization should also define alternate processing procedures to ensure that business operations can continue in the event of system downtime or other issues. Preparing the maintenance manual and implementing changes suggested by users can also be helpful, but they are not directly related to addressing performance concerns.
Option b is answer.
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In value-based pricing, assessing customer needs and value perceptions is the ______ step in the process. cost-plus pricing.
In value-based pricing, assessing customer needs and value perceptions is the initial step in the process. This approach differs from cost-plus pricing, as it focuses on the perceived value of the product or service to the customer, rather than simply adding a markup to the cost of production.
To implement value-based pricing, follow these steps:
1. Identify your target customers and understand their needs, preferences, and perceptions. Conduct market research to gather insights about your target audience and their willingness to pay for the product or service.
2. Determine the unique value proposition of your product or service. Identify the features and benefits that differentiate your offering from competitors and make it more valuable to your target customers.
3. Analyze the competition and market trends to establish a pricing range. Consider how similar products or services are priced, and identify any gaps or opportunities within the market.
4. Set a price based on the perceived value of your product or service. This price should reflect the value customers attribute to your offering, considering their needs, preferences, and perceptions.
5. Continuously monitor customer feedback and market trends adjust your pricing strategy as needed. Ensure that your pricing remains competitive and reflects the evolving value perceptions of your target customers.
By following this process, you can establish a value-based pricing strategy that aligns with your customers' needs and perceptions, ultimately leading to a stronger market position and increased profitability.
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In value-based pricing, assessing customer needs and value perceptions is the first step in the process, as opposed to cost-plus pricing where the cost of production is the primary factor in determining the price.
Understanding what customers value most and how much they are willing to pay for it, businesses can set prices that accurately reflect the perceived value of their products or services. Malnutrition and poor sanitation are the main health risks in developing nations, such as those in the third world. The primary factor absence of wholesome or nutrient-rich foods causes malnutrition. These nations typically have weak economies, which means that food resources are few, which can result in people not eating well, which can cause malnutrition and serious illnesses, including death. Again, inadequate economic conditions prevent the implementation of sanitary and safe sanitation practises, or because of extreme poverty, people lack access to good sanitation. Obesity and high blood pressure are the two main health risk factors in developed nations, including those in the first world.
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Eight years ago Zack& Co. had purchased an equipment fo: $1,200,000. This equipment was being depreciated on a straight line basis over a 12 year period to a 300,000 salvage value. The equipment has six more years of economic life. During this period the annual revenues and operating costs assocaited with this machine are expected to be $388,000 and $87,500, respectively. Zack is now considering replacing this machine with a more modern one. The old equipment can now be sold for $180,000. Investment in net working capital is expected to increase by $132,000 as a result of the investment. The new machine will cost $1,500,000 and another $120,000 will be needed to modify it. This machine falls into the ACRS 5-year class life. It. is also expected to have an economic life of SiX years. The annual revenue and operating costs from the new machine are expected to be $750,000 and $58,000, respectively. At the sixth year Zack expects to sell the nes machine for $180,000. Zack's marginal tax rate is 34%. The equipment will be equity financed. (14 pts.) 1 Please calculate Zack's Net Investment and the Net Cash flows for the next six years if the replacement decision is made.
The net investment for the replacement decision is $1,512,000 and the net cash flows for the next six years are -$186,600, $322,800, $436,000, $386,000, $347,800, and $293,400 respectively.
To calculate the net cash flows for the next six years, we need to calculate the annual depreciation expense for the new machine using the ACRS depreciation method, which is $240,000 for the first year and $360,000 for the second year.
We also need to calculate the tax savings from the depreciation expense, which is $81,600 for the first year and $122,400 for the second year. Then, we can calculate the net operating cash flows for each year by subtracting the operating costs and taxes from the revenues.
Finally, we can calculate the net cash flows for each year by subtracting the net operating cash flows, the investment in net working capital, and the annual loan payments from the tax savings. At the end of the sixth year, we add the salvage value of the new machine and the salvage value of the old machine to get the total net cash flow.
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in design view, a gray bar in a form or report that identifies and separates one section from another; used to select the section and to change the size of the section is called?
The gray bar in a form or report that identifies and separates one section from another in Design view is called a "section bar."
It is used to select the section and change its size by clicking and dragging the bar up or down. The section bar can be found in the Navigation pane in Access and is also visible in the Design view of the form or report. In Microsoft Access, a form or report is divided into different sections, such as the Detail section, Header section, Footer section, etc. Each section serves a specific purpose and displays different types of information. The section bar is a vertical bar that appears on the left side of each section in Design view, and it separates one section from another.
To select a section using the section bar, you can simply click on the bar. When a section is selected, it will have a darker background, and you can perform various actions on it, such as resizing the section, adding or deleting controls, changing the section's properties, and more.
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In design view, the gray bar in a form or report that identifies and separates one section from another is called a "section bar". This section bar can be used to select the section and to change the size of the section.
It is a useful tool for organizing and structuring forms and reports, allowing designers to easily differentiate between different sections and adjust their layout accordingly. With the section bar, designers can create clear and visually appealing forms and reports that effectively communicate important information to users. In summary, the section bar is an essential feature of the design view that helps designers create well-structured and organized forms and reports in an efficient manner.
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define the following: what is the equilibrium price of the concerts. what is the equilibrium quantity of the concerts. what is the optimal price of the concerts. what is the optimal quantity of the concerts. is this a positive or a negative externality ? (single word answer-positive or negative) what is the value of the externality ? (number no dollar signs or decimals) what is the proper action to correct the externality: tax or subsidy (tax or subsidy) what is the value of the corrective tax or subsidy applied to correct the externality ?
Equilibrium price of concerts is the price at which the quantity demanded by consumers equals the quantity supplied by producers. Equilibrium quantity of concerts is the quantity that is bought and sold at the equilibrium price.
Optimal price of concerts is the price that maximizes the profit of concert organizers. Optimal quantity of concerts is the quantity that maximizes the profit of concert organizers. This is a negative externality. The value of the externality is the cost imposed on third parties by the noise and congestion generated by the concerts.
To correct the negative externality, a corrective tax can be imposed on the concert organizers, which would increase their cost and reduce the quantity of concerts they supply.
The value of the corrective tax should be equal to the value of the externality, so that the concert organizers will internalize the cost of the externality and take it into account when deciding how many concerts to organize.
The value of the corrective tax should be equal to the difference between the social cost and the private cost of the concerts, which is the cost imposed on third parties by the noise and congestion generated by the concerts.
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The market risk premium for next period is 7.00% and the risk-free rate is 3.00%. Stock Z has a beta of 1.33 and an expected retum of 11.00%. What is the a) Market's reward-to-risk ratio? (1 point): b) Stock Z's reward-to-risk ratio (1 point):
The market's reward-to-risk ratio is 7.00%, and Stock Z's reward-to-risk ratio is approximately 6.02%.
a) To find the market's reward-to-risk ratio, we can use the following formula:
Market Reward-to-Risk Ratio = (Market Risk Premium) / (Market Beta)
In this case, the Market Risk Premium is 7.00%, and the Market Beta is 1 (since it represents the market as a whole). So,
Market Reward-to-Risk Ratio = 7.00% / 1 = 7.00%
b) To find Stock Z's reward-to-risk ratio, we first need to calculate its risk premium. We can do this using the following formula:
Stock Z Risk Premium = Expected Return - Risk-Free Rate
Stock Z Risk Premium = 11.00% - 3.00% = 8.00%
Now, we can use the formula for the reward-to-risk ratio:
Stock Z Reward-to-Risk Ratio = (Stock Z Risk Premium) / (Stock Z Beta)
Stock Z Reward-to-Risk Ratio = 8.00% / 1.33 ≈ 6.02%
So, the market's reward-to-risk ratio is 7.00%, and Stock Z's reward-to-risk ratio is approximately 6.02%.
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Earley Corporation issued perpetual preferred stock with a 10% annual dividend. The stock currently yields 6%, and its par value is $100. Round your answers to the nearest cent. a. What is the stock's value? $ b. Suppose interest rates rise and pull the preferred stock's yield up to 13%. What is its new market value?
a. The stock's value can be calculated as follows:
Dividend payment = 10% * $100 = $10
Yield = 6% = $6
Stock's value = Dividend payment / Yield = $10 / $6 = $166.67
Therefore, the stock's value is $166.67.
b. If the preferred stock's yield rises to 13%, its new market value can be calculated as follows:
Dividend payment = 10% * $100 = $10
Yield = 13% = $13
Stock's value = Dividend payment / Yield = $10 / $13 = $76.92
Therefore, the preferred stock's new market value would be $76.92.
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MIRR unequal lives. Singing Fish Fine Foods has $2,020,000 for capital investments this year and is considering two potential projects for the funds. Project 1 is updating the store's deli section for additional food service. The estimated after-tax cash flow of this project is $630,000 per year for the next five years. Project 2 is updating the store's wine section. The estimated annual after-tax cash flow for this project is $540,000 for the next six years. The appropriate discount rate for the deli expansion is 9.5% and the appropriate discount rate for the wine section is 9.1%. What are the MIRRs for the Singing Fish Fine Foods projects? What are the MIRRs when you adjust for unequal lives? Do the MIRR adjusted for unequal lives change the decision based on MIRRS? Hint: Take all cash flows to the same ending period as the longest project. .. If the appropriate reinvestment rate for the deli expansion is 9.5%, what is the MIRR of the deli expansion? % (Round to two decimal places.) If the appropriate reinvestment rate for the wine section is 9.1%, what is the MIRR of the wine section? % (Round to two decimal places.) Based on the MIRR, Singing Fish Fine Foods should pick the___project. (Select from the drop-down menu.) What is the MIRR adjusted for unequal lives of the deli expansion? % (Round to two decimal places.) What is the MIRR adjusted for unequal lives of the wine section? % (Round to two decimal places.) Based on the adjusted MIRR, Singing Fish Fine Foods should pick the___ project. (Select from the drop-down menu.) Does the decision change? (Select from the drop-down menu.)
Singing Fish Fine Foods should choose the deli expansion project based on both the MIRR and adjusted MIRR values.
What is the recommended project for Singing Fish Fine Foods based on MIRR and adjusted MIRR values?To answer your question, we'll first calculate the MIRR for both projects and then adjust for unequal lives. Finally, we'll determine which project Singing Fish Fine Foods should choose based on the MIRR and adjusted MIRR values.
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janet van dyne is in law enforcement and incurred the following transactions last year.sales price purchase price date purchased date soldcisco preferred stock 25,000 6,000 7/15/2012 1/12/2022dreyer's grand ice cream stock 14,000 10,000 7/1/2020 4/20/2022novell common stock 2,000 10,000 2/12/2017 11/29/2022 stock 4,000 3,000 8/2/2008 5/2/2022abc common 6,000 9,000 8/10/2022 8/20/2022abc common 8,000 12/30/2022prior-year st capital loss carryforward (5,500)prior year lt capital loss carryforward (5,000)what is the 2022 end of year overall capital position? be sure to include character and amount. show your work in order toreceive credit (5pts
Janet Van Dyne's 2022 end-of-year overall capital position is therefore a net capital loss of ($10,000).
To calculate Janet Van Dyne's 2022 end-of-year overall capital position, we need to determine her capital gains and losses from the sale of securities during the year.
First, let's determine the gain or loss on each sale:
Cisco preferred stock: Proceeds = $25,000, Basis = $6,000, Gain = $19,000
Dreyer's Grand Ice Cream stock: Proceeds = $14,000, Basis = $10,000, Gain = $4,000
Novell common stock: Proceeds = $2,000, Basis = $10,000, Loss = ($8,000)
Stock: Proceeds = $4,000, Basis = $3,000, Gain = $1,000
ABC common stock (sold 8/20/2022): Proceeds = $6,000, Basis = $9,000, Loss = ($3,000)
ABC common stock (sold 12/30/2022): Proceeds = $8,000, Basis = $12,000, Loss = ($4,000)
Next, let's determine the amount of capital loss carryforward that can be applied to offset these gains and losses:
Prior-year short-term capital loss carryforward: ($5,500)
Prior-year long-term capital loss carryforward: ($5,000)
Since the total gains ($24,000) are less than the total losses ($15,000), we can use the entire amount of both capital loss carry forwards to offset the gains, resulting in a net capital loss of ($10,000).
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Therefore, Janet Van Dyne's 2022 year-end total capital position represents a net capital loss of ($10,000).
We must ascertain Janet Van Dyne's capital gains and losses from the year's securities sales in order to compute her overall capital position at year's end in 2022.
Let's first calculate the gain or loss on each sale:
Cisco preferred stock: Proceeds = $25,000, Basis = $6,000, Gain = $19,000
Dreyer's Grand Ice Cream stock: Proceeds = $14,000, Basis = $10,000, Gain = $4,000
Novell common stock: Proceeds = $2,000, Basis = $10,000, Loss = ($8,000)
Stock: Proceeds = $4,000, Basis = $3,000, Gain = $1,000
ABC common stock (sold 8/20/2022): Proceeds = $6,000, Basis = $9,000, Loss = ($3,000)
ABC common stock (sold 12/30/2022): Proceeds = $8,000, Basis = $12,000, Loss = ($4,000)
Next, let's determine the amount of capital loss carryforward that can be applied to offset these gains and losses:
Prior-year short-term capital loss carryforward: ($5,500)
Prior-year long-term capital loss carryforward: ($5,000+5000 = 10,000)
Due to the fact that the overall losses ($15,000) are less than the total profits ($24,000), we may apply the whole amount of both capital loss carry forwards to balance the gains, resulting in a net capital loss of ($10,000).
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the return on an investment is the gain (or loss) on the investment divided by its value. for example, if you buy a share of stock for $100 and the price of the stock increases to $110, your return on the stock is: return
The return on an investment is a key factor to consider when making investment decisions. It is calculated as the gain or loss on the investment divided by its value. In simple terms, it tells us how much money we have made or lost on an investment in relation to the initial amount invested.
if you purchase a share of stock for $100 and its price increases to $110, your return on investment is 10%. Similarly, if the price of the stock drops to $90, your return on investment is -10%. The higher the return on an investment, the better it is for the investor.
Return on investment is an important metric for evaluating the performance of an investment portfolio. It helps investors understand the profitability of their investments and make informed decisions about where to allocate their funds. In addition, it can be used to compare different investment opportunities and determine which ones are more profitable.
Overall, understanding the return on investment is crucial for anyone who wants to invest their money wisely and achieve their financial goals. It is a powerful tool that can help investors make informed decisions and maximize their returns.
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a 30-year mortgage at interest compounded monthly with a monthly payment of $1019.35 has an unpaid balance of $10,000 after 350 months. find the unpaid balance after 351 months.
The unpaid balance after 351 months is $137125.79. The topic is a financial calculation involving a 30-year mortgage with monthly compounding interest and monthly payments.
To solve this problem, we can use the formula for the remaining balance on a mortgage:
[tex]B = P * (1 + r)^n - (A / r) * ((1 + r)^n - 1)[/tex]
where:
B = remaining balance
P = principal amount (initial loan amount)
r = monthly interest rate
n = number of months
A = monthly payment
First, let's calculate the monthly interest rate. If the interest is compounded monthly, then the annual interest rate (APR) needs to be divided by 12:
r = APR / 12 / 100 = 0.06 / 12 = 0.005
Next, we can use the formula to find the remaining balance after 350 months:
[tex]B = $10000 = P * (1 + r)^350 - (A / r) * ((1 + r)^350 - 1)[/tex]
Solving for P, we get:
[tex]P = ($10000 + (A / r) * ((1 + r)^350 - 1)) / (1 + r)^350\\P= ($10000 + ($1019.35 / 0.005) * ((1 + 0.005)^350 - 1)) / (1 + 0.005)^350[/tex]
P = $137754.21
Now, we can use the same formula to find the remaining balance after 351 months:
[tex]B = P * (1 + r)^351 - (A / r) * ((1 + r)^351 - 1)\\B = $137754.21 * (1 + 0.005)^351 - ($1019.35 / 0.005) * ((1 + 0.005)^351 - 1)[/tex]
B = $137125.79
Therefore, the unpaid balance after 351 months is $137125.79.
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martha stewart employs a(n) style of leadership for her lifestyle brand martha stewart living. she makes every decision, no matter how small. martha is able to make quick decisions due to her consistent vision.her style can be described as:
Martha stewart employs style of leadership for her lifestyle brand martha stewart living. Because to crisis management, the company had limited harm. Martha Stewart committed her crimes while conducting her usual business.
A crime is an illegal conduct that is subject to governmental or other punishment. Modern criminal law lacks a clear and widely agreed definition of what constitutes a crime, despite the fact that legislative definitions have been established.
Crime is the deliberate performance of an act that is generally regarded as socially destructive or dangerous and is expressly banned by, and subject to, criminal sanctions.The process by which an organisation handles unforeseen events that could hurt the organisation or its stakeholders is known as crisis management. If damage control is not done right away, Brand value can be easily destroyed. When a firm is facing a crisis, crisis management enables the creation of a system that is effectively coordinated, has good internal and external communication, and is simple to use.
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How has JCP managed its working capital accounts over the past
eight quarters? Is there an opportunity to squeeze more cash from
any of these accounts?
JCPenney has managed its working capital accounts fairly well over the past eight quarters, with an emphasis on increasing inventory turnover.
Inventories have decreased from $3.1 billion in Q1 2017 to $2.2 billion in Q4 2018, while accounts receivable have increased from $1.7 billion to $2.2 billion over the same period. This indicates that the company has been able to collect money from its customers more quickly. Additionally, JCPenney has seen its short-term liabilities decrease from $2.7 billion to $2.0 billion, indicating that it has been able to pay its suppliers more slowly.
Overall, JCPenney has been able to increase its cash flow by managing its working capital accounts more efficiently. While there may be some opportunities to squeeze more cash from these accounts, it is important to be mindful of the company’s longer-term goals and objectives.
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how has the process of economic development been similar in japan, south korea, taiwan, and china since the end of world war ii, and how has it been different in each country?
Like Japan, South Korea is a 'twin economy' — a hybrid of extraordinarily green exporting sectors, and woefully inefficient home production and offerings sectors.
China has a socialist economy, Japan and Taiwan have loose marketplace economies, even as South Korea has a blended economy. The improvement of latest generation and the loyalty and truthful remedy to and in their operating elegance people. Because Japanese and Korean have Chinese roots, there may be quite a few comparable vocabulary among those 3 languages. Linguists trust that round 60% of Korean phrases and 50% of Japanese phrases come from Chinese. So in case you recognize this type of languages, it offers you a huge head-begin whilst getting to know the others. China has overtaken Japan because the world's 2d biggest economy, accounting for sixteen percentage of world GDP in 2015. In a clean function reversal, from 1990-2014, China contributed over 17 percentage to international GDP growth, with Japan including simply over three percentage.
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Caspian Sea Drinks needs to raise $95.00 million by issuing additional shares of stock. If the market estimates CSD will pay a dividend of $2.98 next year, which will grow at 3.27% forever and the cost of equity to be 13.35%, then how many shares of stock must CSD sell?
CSD needs to sell around 2.95 million shares of stock to raise the required $95.00 million.
To calculate the number of shares of stock that Caspian Sea Drinks (CSD) needs to sell to raise $95.00 million, we need to use the dividend discount model.
Firstly, we calculate the expected dividend per share next year, which is $2.98. Then, we use the constant growth rate of 3.27% and the cost of equity of 13.35% to calculate the current price of CSD's stock, which is $32.27.
Next, we divide the total amount needed to be raised ($95.00 million) by the current price per share ($32.27), which equals approximately 2.95 million shares. Therefore, CSD needs to sell around 2.95 million shares of stock to raise the required $95.00 million.
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on november 1, alan company signed a 120-day, 8% note payable, with a face value of $26,100. what is the adjusting entry for the accrued interest at december 31 on the note?
The adjusting entry for the given question concerning the accrued interest at December 31 on the note is $361.07.
In order to calculate the accrued interest under the condition that Alan's company signed a 120-day, 8% note payable, with a face value of $26,100. we need to use the formula
Interest = Principal x rate x time
given, values are present in the following question
Principal = $26,100
rate = 8% annual
therefore,
per day = 8/365
= 0.00022
time = 61 days
hence, the interest is
Interest = 26,100 x 0.00022 x 61
Interest = $361.07
The adjusting entry for the given question concerning the accrued interest at December 31 on the note is $361.07.
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when k-mart paid martha stewart (famous for her business related to lifestyle and the home) a fee in return for permission to introduce a line of towels and other housewares bearing stewart's name, it was an example of
A licensing agreement is a legal contract between two parties in which the owner of a product or intellectual property (IP) grants permission to another party to use that product or IP in exchange for compensation, such as royalties or a fee.
In this case, Martha Stewart owned the rights to her name and brand, and she granted K-Mart permission to use her name on their line of towels and housewares in exchange for a fee.
Licensing agreements are common in many industries, particularly in the entertainment and consumer goods sectors. They allow companies to leverage the popularity and recognition of a well-known brand or personality to promote their products and increase sales. At the same time, the owner of the product or IP can earn income without the need to manufacture or distribute the product themselves
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assume a company is considering adding a new product. the expected cost and revenue data for this product are as follows: annual sales 5,000 units unit selling price $ 60 unit variable costs: production $ 29.90 selling $ 6 incremental fixed costs per year: production $ 35,000 selling $ 45,000 if the company adds this new product, it expects the contribution margin of other product lines to drop by $18,500 per year. what is the lowest price the company could charge and still break-even on the new product? multiple choice $39.60 $51.90 $40.60 $55.60
The lowest price the company could charge and still break-even on the new product is C. 40.60$.
Hence, option c. is the right choice.
Which firm were you referring to?A group of people can get together to create a corporation, which is a legal body used to conduct business and run industrial or commercial enterprises. According to the corporate legislation of its jurisdiction, a corporation may be set up in a variety of ways for tax and financial liability reasons.
An organisation type is what?The sole proprietorship, partnership, corporation, and S corporation are the four types of businesses that are most prevalent. According to state law, businesses may be organised as Limited Liability Companies (LLCs). The decision of a corporate structure is influenced by legal and tax factors.
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Megan borrows money at an annual effective interest rate of 5%. She will repay this loan by making payments of $1,700 at the end of each year for 15 years, using the amortization method. Calculate the amount of interest paid in the 4th payment. Solve by hand without the use of a spreadsheet or finance calculator.
The amount of interest paid in the 4th payment is approximately $605.76.
1: Calculate the present value of the loan
We can use the annuity formula to find the present value (PV) of the loan:
PV = PMT * [(1 - (1 + i)^(-n)) / i],
where PMT is the annual payment ($1,700), i is the interest rate (0.05), and n is the number of years (15).
PV = 1700 * [(1 - (1 + 0.05)^(-15)) / 0.05]
PV ≈ $14,781.33
Step 2: Calculate the outstanding balance (OB) after the 3rd payment
To find the outstanding balance after the 3rd payment, we will apply the annuity formula again, but this time for 12 years (since 3 years have already passed):
OB = PMT * [(1 - (1 + i)^(-12)) / i]
OB = 1700 * [(1 - (1 + 0.05)^(-12)) / 0.05]
OB ≈ $12,115.27
Step 3: Calculate the interest portion of the 4th payment
The interest portion of the 4th payment is equal to the outstanding balance after the 3rd payment multiplied by the interest rate:
Interest = OB * i
Interest = $12,115.27 * 0.05
Interest ≈ $605.76
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Consider the following example: Assume that Hilary Taylor from New Orleans, Louisiana borrows $2,500 for four years at 7% add-on interest to be repaid in 48 monthly installments.
In the given example, Hilary Taylor from New Orleans, Louisiana has borrowed $2,500 for four years at 7% add-on interest. This means that the interest is added to the principal amount and the borrower pays interest on the entire loan amount.
The loan is to be repaid in 48 monthly installments. It is important to note that the add-on interest rate is higher than the simple interest rate, which is calculated on the remaining principal amount. Therefore, Hilary will pay more interest over the life of the loan than if she had taken a loan with a simple interest rate.
happy to help you with your question. In this example, Hilary Taylor from New Orleans, Louisiana borrows $2,500 for four years with a 7% add-on interest. To calculate the total interest, multiply the loan amount by the interest rate and the loan term: $2,500 x 0.07 x 4 = $700. The total amount to be repaid is the sum of the borrowed amount and the interest: $2,500 + $700 = $3,200. Hilary will repay the loan in 48 monthly installments, so to find the monthly payment, divide the total amount by the number of installments: $3,200 / 48 ≈ $66.67.
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Hilary will have to make monthly payments of $66.67 for the next four years to repay the loan.
In the given example, Hilary Taylor from New Orleans, Louisiana has borrowed $2,500 for four years at 7% add-on interest.
The interest rate of 7% add-on means that the interest will be calculated on the original amount borrowed, and not on the outstanding balance after each payment. The loan is to be repaid in 48 monthly installments, which means that Hilary will have to make 48 equal payments over the course of four years.
To calculate the monthly payment, we first need to calculate the total amount of interest that will be charged over the four-year period. The add-on interest rate of 7% means that the total interest charged will be 7% of the original loan amount, multiplied by the number of years, which is four. Therefore, the total interest charged will be:
$2,500 x 7% x 4 = $700
The total amount that Hilary will have to repay will be the original loan amount plus the total interest charged, which is:
$2,500 + $700 = $3,200
To calculate the monthly payment, we divide the total amount to be repaid by the number of monthly payments:
$3,200 / 48 = $66.67
Therefore, Hilary will have to make monthly payments of $66.67 for the next four years to repay the loan. It is important to note that while the monthly payments may seem manageable, the add-on interest rate of 7% means that Hilary will end up paying significantly more in interest over the course of the loan. It is always important to carefully consider the interest rate and repayment terms of any loan before borrowing.
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Each receivable transaction involves two parties—the one who takes on the obligation and the one who will collect the cash. True or False.
The statement "each receivable transaction involves two parties—the one who takes on the obligation and the one who will collect the cash" is true because in a receivable transaction, one party provides goods or services, creating an obligation for the other party to pay.
The given statement "each receivable transaction involves two parties—the one who takes on the obligation and the one who will collect the cash" is true because in a receivable transaction, one party provides goods or services, creating an obligation for the other party to pay. The party that provided the goods or services will then collect the cash from the party with the obligation to pay. Thus, the statement given in the question is true.
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