A stock just announced that its next annual dividend will be $1.02 and it expects to increase that dividend by 2.5 percent annually. The stock is currently selling for $28 a share. How do you compute the expected rate of return?
a) i = ($1.02/$28) + 0.025
b) i = [($1.02 x 1.025)/$28] + 0.025
c) i = ($1.02/$28) - 0.025
d) i = ($1.02 X 1.025)/$28

Answers

Answer 1

Answer: A. i = ($1.02/$28) + 0.025

Explanation:

The expected rate of return will be calculated as:

= (Expected dividend/Price today) + growth rate

where,

Expected dividend = $1.02

Price today = $28

Growth rate = 2.5%

Then, slotting the figures into the equation will give:

= (1.02/28) + 2.5%

= (1.02/28) + 0.025

Therefore, the correct option is A


Related Questions

Contrary to popular opinion, CEOs of major U.S. companies come from a wide variety of private universities and state universities, not just a handful of well-publicized MBA programs. What does this fact tell you about sources of power and organizational politics

Answers

Answer: Power is earned

Explanation:

The fact that so many influential CEOs come from such a wide array of universities shows that they had to work to get to where they are today and were not simply handed positions because of the university they came from.

It shows that if one wants to succeed in business, their alma mater does not matter. They could be from an Ivy league college or from a state college in Mississippi, what matters is their determination to work hard and gain a good track record that will take them all the way to the top.

Kaskin, Inc., stock has a beta of 1.2 and Quinn, Inc., stock has a beta of .6. Which of the following statements is most accurate?
a. The expected rate of return will be higher for the stock of Kaskin, Inc., than that of Quinn, Inc.
b. The stock of Kaskin, Inc., has more total risk than Quinn, Inc.
c. The stock of Quinn, Inc., has more systematic risk than that of Kaskin, Inc.

Answers

Answer: a. The expected rate of return will be higher for the stock of Kaskin, Inc., than that of Quinn, Inc.

Explanation:

The beta of a stock measures its systematic risk which is its risk in relation to the market. With a higher systematic risk, there would be a higher expected return to compensate for this risk.

The beta is used to calculate the expected return in the CAPM formula:

Expected return = Risk free rate + Beta * Market premium

Note how the higher the beta, the higher the expected return based on the above formula.

Suppose that Michelle buys a cappuccino from Paul's Cafe and Bakery for $4.75. Michelle was willing to pay up to $6.75 for the cappuccino and Paul's Cafe and Bakery was willing to accept S1.25 for the cappuccino. Based on this information, answer the questions below.
Michelle's consumer surplus is equal to: _______
Paul's Bakery's producer surplus is equal to:__________

Answers

Answer:

$2

$3.50

Explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.

Consumer surplus = willingness to pay – price of the good

$6.75 - $4.75 = $2

Producer surplus is the difference between the price of a good and the least price the seller is willing to sell the product

Producer surplus = price – least price the seller is willing to accept

$4.75 - $1.25 = $3.5

Sale of short-term stock investments $ 3,000
Cash collections from customers 7,900
Purchase of used equipment 2,600
Depreciation expense 1,000
Compute cash flows from investing activities using the above company information. (Amounts to be deducted should be indicated by a minus sign.)
Investing Activities

Answers

Answer: $400

Explanation:

Cashflows from Investing Activities refer to those that have to do with the purchase or sale of fixed assets as well as other company securities.

Cashflows from investing activities here are:

= Sale of short term stock investments - Purchase of used equipment

= 3,000 - 2,600

= $400

There are three uncertain (random) variables in this problem. Select the variables that should represent uncertainty in this model. Group of answer choices What type of fruit to grow Initial Research and Development Cost Salvage Price Yield Pre-Orders Picked up Pre-Orders Placed

Answers

Answer:

Yield

Pre orders placed

Pre orders picked.

Explanation:

Uncertain variables are those which can not be predicted. Output of uncertain variables may vary. A farmer has uncertain variables like yield of the crops, order placed and orders picked. Research and development cost is predictable and analysis make it easy to identify benefit of research.

Suppose Sam and Teresa are playing a game in which both must simultaneously choose the action Let Or Right. The payoff matrix that follows shows the payoff each person Will earn as a function Of both Of their choices. For example, the lower-right cell shows that if Sam chooses Right and Teresa chooses Right, Sam will receive a payoff of S and Teresa will receive a payoff of 1.

Teresa
Left Right
Sam Left 8, 4 4, 5
Right 5, 4 6, 5

The only dominant strategy in this game is for __________ to choose____________ . The outcome reflecting the unique Nash equilibrium in this game is as follows: Sam chooses _____________ and Teresa chooses ______________.

Answers

Answer:

The only dominant strategy in this game is for Teresa to choose Right. The outcome reflecting the unique Nash equilibrium in this game is as follows: Sam chooses Right and Teresa chooses Right.

Explanation:

Given:

                        Teresa

                     Left       Right

Sam Left     8, 4         4, 5

       Right   5, 4         6, 5

A dominant strategy is one that makes a player in a game better off regardless of the choice of strategy of his opponent.

An examination of the payoff matrix above shows that when Sam plays Left, Teresa will play Right because 5 > 4. When Sam plays Right, Teresa will still play Right because 5 > 4. This is an indication that Teresa will always play Right no matter what Sam plays. Therefore, the dominant strategy for Teresa is Right.

On the other hand, when Teresa plays Left, Sam will also play Left because 8 > 5. And when Teresa plays Right, Sam will also play Right because 6 > 4. This implies that Sam does not have any unique strategy that make him better off. Therefore, Sam does NOT have a dominant strategy.

Therefore, we have:

The only dominant strategy in this game is for Teresa to choose Right. The outcome reflecting the unique Nash equilibrium in this game is as follows: Sam chooses Right and Teresa chooses Right.

If a company reports a net loss, it Group of answer choices may still have a net increase in cash. will not be able to pay cash dividends. will not be able to get a loan. will not be able to make capital expenditures.

Answers

Answer:

may still have a net increase in cash

Explanation:

In the case when the company recognized the net loss so it might be the condition that there is an increase in the cash balance as in the case as the closing balance should be more than the beginning balance of cash

So as per the given question, the above should be the answer and the same is relevant

An investor will choose between Asset Q with an expected return of 6.5% and a standard deviation of 5.5%, Asset U with an expected return of 8.8% and a standard deviation of 5.5%, and Asset B with an expected return of 8.8% and a standard deviation of 6.5%. Which one should the investor prefer

Answers

Answer:

Asset U

Explanation:

Reward-to-volatility ratio for Asset Q = Expected return / standard deviation

Reward-to-volatility ratio for Asset Q = 6.5% / 5.5%

Reward-to-volatility ratio for Asset Q = 1.1818

Reward-to-volatility ratio for Asset U = Expected return / standard deviation

Reward-to-volatility ratio for Asset U = 8.8% / 5.5%

Reward-to-volatility ratio for Asset U = 1.6

Reward-to-volatility ratio for Asset B = Expected return / standard deviation

Reward-to-volatility ratio for Asset B = 8.8% / 6.5%

Reward-to-volatility ratio for Asset B = 1.3538

The  investor should prefer Asset U because its has the highest reward to volatility ratio among the three options.

Use the following information to answer questions Skip to question [The following information applies to the questions displayed below.] The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $ 43,000 $ 52,000 Work in process 10,200 21,300 Finished goods 63,000 35,600 Activities and information for May Raw materials purchases (paid with cash) 210,000 Factory payroll (paid with cash) 345,000 Factory overhead Indirect materials 15,000 Indirect labor 80,000 Other overhead costs 120,000 Sales (received in cash) 1,400,000 Predetermined overhead rate based on direct labor cost 70 %

Answers

Answer:

Missing word "a. Direct labor usage. b. Indirect labor usage. c. Total payroll paid in cash.  Prepare journal entries for the above transactions for the month of May"

S/n    General Journal                           Debit         Credit

a        Work in Process inventory       $265,000

         ($345,000 - $80,000)

                 Factory wages payable                        $265,000

          (To record for Direct labor usage)

b        Factory overhead                      $80,000

                 Factory wages payable                        $80,000

         (To record for Indirect labor usage)

c        Factory wages payable             $345,000

                Cash                                                        $345,000

         (To record for Total payroll paid in cash)

Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 16, it paid the full amount due. The amount of the cash paid on August 16 equals:___.
A. $8, 167.50.
B. $9, 652.50.
C. $9, 750.00.
D. $8, 250.00.
E. $8, 152.50.

Answers

Answer:

A. $8, 167.50

Explanation:

The fact Juniper company returned $1,500 worth of merchandise, means that it is only obliged to pay the amount of $8,250($9,750-$1,500).

However, the payment was made on 16th August, which is the discount period of 10 days, hence, the cash paid on August 16 is computed thus:

cash paid=amount of merchandise owed*(1-discount rate)

discount rate=1%(1% discount if payment is made within 10 days of the purchase date)

cash paid=$8,250*(1-1%)

cash paid=$ 8,167.50  

company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 350 units. Ending inventory at January 31 totals 150 units. Units Unit Cost Beginning inventory on January 1 320 $ 3.00 Purchase on January 9 80 3.20 Purchase on January 25 100 3.34 Required: Assume the periodic inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the weighted average method. (Round per unit costs to 2 decimal places. Amounts to be deducted should be indicated with a minus sign.)

Answers

Answer:

Company A

The cost assigned to Ending Inventory under periodic inventory system and based on the weighted average method is:

= $465

Explanation:

a) Data and Calculations:

                                                        Units     Unit Cost  Total Costs

Beginning inventory on January 1   320        $ 3.00      $960 (320 * $3.00)

Purchase on January 9                      80           3.20         256 (80 * $3.20)

Purchase on January 25                  100           3.34          334 (100 * $3.34)

Total                                                  500         $3.10     $1,550 ($1,550/500)

Units sold                                        -350          $3.10    -$1,085 (350 * $3.10)

Ending inventory                             150           $3.10       $465 (130 * $3.10)

Target Corporation issues a 20-year $9,000,000 bond on January 1, 20xx with a 9% stated interest rated. Interest is paid semiannually on June 30 and December 31st. The bond will mature in twenty years. When Target Corporation retires the bond at the end of 20 years, what amount will they debit to the bonds payable account?

Answers

Answer:

Target Corporation

The amount that will be debited to the bonds payable account on December 31, 2020 will be:

= $9,000,000

Explanation:

a) Data and Calculations:

January 1, 20xx:

Face value of bonds issued = $9,000,000

Maturity period = 20 years

Stated interest rate = 9%

Interest payment = June 30 and December 31

Semiannual Interest Payment in dollars = $405,000 ($9,000,000 * 4.5%)

b) At maturity of the bonds after 20 years, Target Corporation will debit the Bonds Payable account and credit its Cash account with the sum of $9,000,000.  On that date, the bond's carrying amount will be equal to the Bonds Payable account balance, all things remaining equal.

XYZ Company has a variable cost ratio of 40%, fixed expenses of $200,000, and desires to earn operating income of $100,000. Total sales revenue required to achieve XYZ Company's desired operating income is:

Answers

Answer:

Sales revenue = $500,000

Explanation:

Below is the calculation:

Formula for variable cost ratio = Total variable expenses (Total variable cost) / Net Sales = 40%

40% = Total variable cost / Net Sales

Total variable cost = 0.40 Net sales

Operating income = Total revenue - fixed cost - variable cost

100,000 = Total revenue - 200,000 - 0.40 total revenue

300,000 = 0.60 total revenue

Total Revenue = 300,000/ 0.6

Sales revenue = $500,000

Determine whether each of the following accounting duties mainly involves financial accounting, managerial accounting, or tax accounting.

1. Consulting with treasurer on cash flows
2. Intemal auditing
3. Estate planning
4. External auditing
5. Tax consulting
6. Analyzing extema financial reports
7. Planning transactions to minimize taxes
8. Enforcing tax laws Financial accounting Tax accounting

Answers

Answer:

Explanation:

1. managerial

2, managerial

3. financial

4. financial

5. tax

6. financial

7. tax

8. tax

The classification of the following accounting duties related to financial accounting, managerial accounting, or tax accounting is as follows:

Consulted with the treasurer for the cash flows should be the managerial accounting as it is the management part.Internal auditing is managerial accounting.Estate planning is related to tax so it is a tax accounting.External auditing is classified as financial accounting.Tax consulting is related to tax so it is a tax accounting.External Financial reports should be analyzed so it is a financial accounting.For minimizing the taxes, tax accounting should be used.For enforcing the tax laws, tax accounting should be used.

In this, the following transactions should be classfied.

Learn more about the accounting here: brainly.com/question/19436415

Lei Corporation has bonds on the market with 12.5 years to maturity, a YTM of 7.2 percent, a par value of $1,000, and a current price of $1,030. The bonds make semiannual payments. What must the coupon rate be on these bonds

Answers

Answer:

Coupon rate= 19.1%

Explanation:

Giving the following information:

Years to maturity= 12.5 years

YTM= 7.2 percent

Par value= $1,000

Current price= $1,030

To calculate the coupon, we need to use a financial calculator:

Function= CMPD

n= 12.5

I%= 7.2

PV= -1,030

PMT= solve = $191

FV= -1,000

Now, the coupon rate:

Coupon rate= 191/1,000

Coupon rate= 19.1%

Consider a firm that has fixed costs of $300. The firm also faces a marginal cost of $600 for producing the first unit of output, $200 for producing the second unit, and $100 for producing the third unit. What is the average total cost of producing three units of output?

Answers

Answer: $400 per unit

Explanation:

The total cost of producing all three units is:

= Fixed cost + marginal costs

= 300 + 600 + 200 + 100

= $1,200

The average total cost is:

= 1,200 / Number of units

= 1,200 / 3

= $400 per unit

Because of their sharp quality text output and fast printing speeds, ___ printers are often preferred by businesses.

Answers

Answer:

Laser printer

Explanation:

Laser printers are quicker than inkjet printers (producing more pages per minute), generate higher-quality output (with some limitations), and are better suited for high-volume production. Laser printers produce significantly finer lines than inkjet printers, making them ideal for text, logos, and corporate information graphics.

HR can foster a triple bottom approach through incentive plans that focus on achieving comprehensive results rather than solely on profit incentives.
a. True
b. False

Answers

Answer:

a. True

Explanation:

Human resources management (HRM) can be defined as an art of managing, controlling and improving the number of people (employees or workers), functions, activities which are being used effectively and efficiently by an organization.

Thus, human resources managers are saddled with the responsibility of recruiting, managing and improving the welfare and working conditions of the employees working in an organization.

A triple bottom line (TBL) is a business management framework or model that comprises three (3) main components, which are; financial, environmental and social.

Human resources (HR) can enhance a triple bottom approach within an organization by establishing incentive plans that is typically focused on achieving comprehensive results rather than solely on profit incentives. Thus, it would foster the growth and development of an organization with respect to finance, environmental and social factors.

The Dulac Box plant works two 8-hour shifts each day. In the past, 1000 cypress packing boxes were produced by the end of each day. The use of new technology has enabled them to increase productivity by 20%. Productivity is now approximately:____.
A) 32.5 boxes/hr.B) 40.6 boxes/hr.C) 62.5 boxes/hr.D) 81.25 boxes/hr.E) 300 boxes/hr.

Answers

Answer:

The Dulac Box

Productivity is now approximately:____.

= 75 boxes/hr

Explanation:

a) Data and Calculations:

Number of shifts per day = 2

Each shift works 8 hours

Total hours worked each day = 16 hours

Number of cypress packing boxes produced each day = 1,000

Productivity per hour = 62.5 boxes/hr (1,000 boxes/16 hours)

Increase in productivity from the use of new technology = 20%

Therefore, the number of cypress packing boxes produced each day will increase by 20% to 1,200 boxes (1,000 * 1.2)

New Productivity per hour = 75 boxes/hr

Which correctly identifies a condition which must be met for creditors to force a firm into involuntary bankruptcy?

Answers

bankruptcy is the best way to wipe out your debt and get a fresh start.

There is an increase in the demand for aspirin at the same time as workers in the aspirin industry receive a substantial pay increase. What will most likely happen?

Answers

Answer:

There would be an increase in equilibrium quantity and there would be an indeterminate effect on equilibrium price

Explanation:

A bond that pays interest semiannually has a price of $941.35 and a semiannual coupon payment of $26.00. If the par value is $1,000, what is the current yield

Answers

Answer:

5.52%

Explanation:

Calculation to determine the current yield

Current yield = ($26.00 × 2)/$941.35

Current yield=$52/$941.35

Current yield= .0552*100

Current yield= 5.52%

Therefore the Current yield is 5.52%

Classify each statement about the Federal Reserve System as either true or false.
1. The Federal Reserve was established by the U.S. Constitution in the late 1700s.
2. The national objectives of the Federal Reserve include promoting economic growth, full employment, stable prices, and moderate interest rates.
3. All Federal Reserve actions are subject to veto by the executive branch.
4. The Federal Reserve determines monetary policy in the United States.
5. The Federal Reserve was created by the Federal Reserve Act of 1913.

Answers

Answer:

1. The Federal Reserve was established by the U.S. Constitution in the late 1700s

Classification: False

2. The national objectives of the Federal Reserve include promoting economic growth, full employment, stable prices, and moderate interest rates.

Classification: True

3. All Federal Reserve actions are subject to veto by the executive branch.

Classification: False

4. The Federal Reserve determines monetary policy in the United States.

Classification: True

5. The Federal Reserve was created by the Federal Reserve Act of 1913.

Classification: True

When a company outsources some of its work / activities currently done by itself, it ultimately shifts the cost structure of the company. In most cases this shift entails:

Answers

Answer:

Outsourcing Company Activities

The shift in the cost structure of the company entails:

the elimination of most fixed costs and making variable costs to become more prominent.

Explanation:

A company's cost structure describes the relative proportions of fixed and variable costs which the company incurs in its business activities.  Outsourcing is a cost-driven strategy that involves the use of outside vendors to perform services and create goods that were traditionally produced in-house, thereby eliminating some employees and facilities, and thus, reducing cost.

Phương pháp công ty Samsung xác định giá, phân tích ưu/ nhược điểm:
help me

Answers

I’m not sure how to help you.

MC Qu. 117 Cosi Company uses a job order costing... Cosi Company uses a job order costing system and allocates its overhead on the basis of direct labor costs. Cosi expects to incur $830,000 of overhead during the next period, and expects to use 53,000 labor hours at a cost of $10.00 per hour. What is Cosi Company's overhead application rate

Answers

Answer:

157%

Explanation:

Calculation to determine Cosi Company's overhead application rate

First step is to calculate Total DL Cost

Total DL Cost = 53,000 hours * $10/hr

Total DL Cost= $530,000

Now let determine the overhead application rate

OH rate = $830,000/$530,000*100

OH rate= 157%

Therefore Cosi Company's overhead application rate is 157%

The March 1 inventory of finished units at the Kay Company is 5,000. During March the company plans to sell 40,000 units and desires a March 31 inventory of 10,000 units. The number of units that the company should plan on producing in March is: A. 60,000 units B. 50,000 units C. 45,000 units D. 40,000 units E. 35,000 units

Answers

Answer:

C. 45,000 units

Explanation:

Inventory of finished units at March 31

10,000

Add:

Sales units

40,000

Total units

50,000

Less:

Inventory of finished units March 1

(5,000)

Balance

45,000

Therefore, the number of units that the company should plan on producing in March is 45,000 units

If you could invent something what would it be

Answers

Teleporting machine. ...
Cooling beds and pillows in warm nights. ...
Snooze button for kids. ...
Instant cooling machine. ...
Locator for missing things. ...
Robot house help. ...
Dream store. ...

When something is evaluated according to ______, this is called finding the value on an ad valorem basis.

Answers

Answer:

its value.

Explanation:

Ad valorem is a Latin word for "according to value" and as such it simply means to evaluate something according to its value.

Hence, when something is evaluated according to its value, this is called finding the value on an ad valorem basis.

Taxation can be defined as the involuntary or compulsory fees levied on individuals or business entities by the government to generate revenues used for funding public institutions and activities.

In Taxation, we have what is referred to as ad valorem tax which refers to a property tax.

Property tax is a type of tax that is charged or levied based on the value of a person's home or business. Thus, it is mainly taxed on physical assets or properties such as land, building, cars, business, etc.

Bill’s Mechanical Devices Inc. produces robots for the automotive industry. If its average variable costs are given by AVC = 25, its fixed costs are $2,500, and it charges $75 a robot, what is Bill’s break-even level of output?

Answers

Answer:

50 units

Explanation:

The computation of the break even level of output is given below:

TVC = AVC × Q

= 25 × Q

Total cost is

= TVC + FC

= 25Q + $2,500

Total revenue is

= P × Q

= 75Q

Now in Break even

TR = TC

75Q = 25Q + $2,500

Q = $2,500 ÷ 50Q

= 50 units

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