Answer:
Scare-2-B-U (S2BU)
a) The expected revenues for each month:
Month Number of Occasions Expected Revenue
April 40 $12,400
May 35 10,850
June 20 6,200
July 30 9,300
August 55 17,050
September 120 37,200
Total 300 $93,000
b) The expected cash receipts:
April May June July
Expected revenue $12,400 $10,850 $6,200 $9,300
20% 2 months $1,240 $1,860 $3,410 $7,440
50% 1 month 5,425 3,100 4,650 8,525
30% delivery date 3,720 3,255 1,860 2,790
Cash receipts $10,385 $8,215 $9,920 $18,755
Explanation:
a) Data and Calculations:
Average selling price for each costume = $310
Cash Collections:
20% 2 months before delivery
50% 1 month before delivery
30% on the delivery date
Month Number of Occasions Expected Revenue
April 40 $12,400
May 35 10,850
June 20 6,200
July 30 9,300
August 55 17,050
September 120 37,200
Total 300 $93,000
April May June July August Sept.
Expected revenue $12,400 $10,850 $6,200 $9,300 $17,050 $37,200
20% 2 months $1,240 $1,860 $3,410 $7,440
50% 1 month 5,425 3,100 4,650 8,525 $18,600
30% delivery date 3,720 3,255 1,860 2,790 5,115 $11,160
Cash receipts $10,385 $8,215 $9,920 $18,755
Investing $2,000,000 in TOM's Channel Support Systems initiative will at a minimum increase demand for your products 3.0% in this and in all future rounds. (Refer to the TOM Initiative worksheet in the CompXM Decisions menu.) Looking at the Round 0 Inquirer for Andrews. last year?s sales were $163,189,230. Assuming similar sales next year. the 3.0% increase in demand will provide $4,895,677 of additional revenue. With the overall contribution margin of 34.1%. after direct costs this revenue will add $1,669,426 to the bottom line. For simplicity, assume that the demand increase and margins will remain at last year's levels. How long will it take to achieve payback on the initial $2,000,000 TQM investment, rounded to the nearest month?
a) TOM investment will not have a significant financial impact
b) 5 months
c) 14 months
d) 10 months
Answer:
c) 14 months
Explanation:
Initial investment = $2,000,000
Revenue = $1,669,426
Profit = $2,000,000 - $1,669,426 = $330,574
Payback period = 1 + [Profit/Revenue]
Payback period = 1 + [$330,574/$1,669,426]
Payback period = 1 + 0.198017
Payback period = 1.198017 years
Payback period = 1.198017 * 12 months
Payback period = 14.376204 months
Payback period = 14 months approximately.
Which statement describes the word “iterative”?
Answer:
D.
Explanation:
The word 'iterative' is derived from the Latin word 'iterare', which means 'to repeat.'
Iterative is a term used to define a process of repetition to attain the desired outcome. It is a repetitive process performed to improve or do better than before.
The statement that correctly defines the term 'iterative' is option D. The statement talks about working in cycles (repetition) to get a desired result of (refined product).
Therefore, option D is correct.
The higher prices charged by monopolists: Group of answer choices are like a private tax that redistributes income from consumers to monopoly sellers. are socially optimal because they better reflect how much society values the good relative to the resources used to produce it. have no effect on the distribution of income. return to consumers through the public goods provided by monopolies.
Answer:
are like a private tax that redistributes income from consumers to monopoly sellers.
Explanation:
A monopoly is a market structure which is typically characterized by a single-seller who sells a unique product in the market by dominance. This ultimately implies that, it is a market structure wherein the seller has no competitor because he is solely responsible for the sale of unique products without close substitutes. Any individual that deals with the sales of unique products in a monopolistic market is generally referred to as a monopolist.
For example, a public power company is an example of a monopoly because they serve as the only source of power utility provider to the general public in a society.
The higher prices charged by monopolists are like a private tax that redistributes income from consumers to monopoly sellers because the consumers are left with no choice than to patronize these monopolists for essential goods and services since they are the only seller.
How the experience affects buyer behavior.
Answer:
because it does
Explanation:
A
Answer:
Situational influences are temporary conditions that affect how buyers behave. They include physical factors such as a store's buying locations, layout, music, lighting, and even smells. Companies try to make the physical factors in which consumers shop as favorable as possible.
Explanation:
The Gardner Company, a client of your firm, has come to you with the following problem. It has three clerical employees who must perform the following functions:
a. Maintain the general ledger
b. Maintain the accounts payable ledger
c. Maintain the accounts receivable ledger
d. Prepare checks for signature
e. Maintain the cash disbursements journal
f. Issue credits on returns and allowances
g. Reconcile the bank account
h. Handle and deposit cash receipts
Assuming equal abilities among the three employees, the company asks you to
assign the eight functions to them to maximize internal control. Assume that these employees will perform no accounting functions other than the ones listed.
Answer:
16
Explanation:
lol
An increase price caused no change in quantity demanded. Thus, demand must be
Hide answer choices
A C) elastic
B D) perfectly elastic
C B) inelastic
A) perfectly inelastic
Answer:
Perfectly inelastic
Explanation:
A demand is perfectly inelastic when quantity demanded does not change in response to a change in price.
An increase in price caused no change in quantity demanded. Thus, demand must be perfectly inelastic. Hence, option D is correct.
What is perfectly inelastic?A good or service whose demand is completely inelastic would not change regardless of price; nevertheless, such a good or service does not exist. Inelastic is the antithesis of elastic, which sees significant differences in demand when the price varies.
Fully elastic and perfectly inelastic are the two elasticity extremes. The quantity falls to zero as the price changes, which is referred to as being perfectly elastic. If the quantity is totally inelastic, a change in the price has no effect on it at all.
People's willingness to pay any price to obtain a life-saving drug is an example of perfectly inelastic demand.
Thus, option D is correct.
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Cement Company, Inc. began the first quarter with 1,000 units of inventory costing $25 per unit. During the first quarter, 3,000 units were purchased at a cost of $40 per unit, and sales of 3,400 units at $65 per units were made. During the second quarter, the company expects to replace the units of beginning inventory sold at a cost of $45 per unit. Cement Company uses the LIFO method to account for inventory. What is the correct journal entry to record cost of goods sold at the end of the first quarter
Answer:
Calculation of Cost of Goods sold under LIFO:
For 3,000 units (3000*40) $120,000
For 400 units (400*25) $10,000
Add: Excess of replacement cost over historical $8,000
cost of LIFO liquidation (400*(45-25))
Cost of Goods sold under LIFO $138,000
Journal entry
Date Account Titles and Explanation Debit Credit
Cost of Goods sold $138,000
Inventory (120000+10000) $130,000
Excess of replacement cost over $8,000
historical cost of LIFO liquidation
Chelsea is a dispatcher who answers calls from patients with medical emergencies
and assigns medical personnel to address patient needs. What education would
Chelsea most likely have needed to complete to get her job?
high school diploma
associate degree
bachelor's degree
master's degree
Answer:
The answer is an associate degree
Explanation:
I just took the test and got it right.
Answer:
associate degree is the answer
You are considering acquiring a common share of Sahali Shopping Center Corporation that you would like to hold for 1 year. You expect to receive both $1.65 in dividends and $25 from the sale of the share at the end of the year. The maximum price you would pay for a share today is __________ if you wanted to earn a 11% return.
Answer:
Present value = $24.009009 rounded off to $24.01
The maximum price that should be paid for a share today is $24.01
Explanation:
To calculate the price of the stock today that should be paid, we can use the discounted cash flow approach. It calculates the value of stock today based on the present value of future values of cash flows that are expected from the stock. Thus the present value of a stock that is expected to pay a dividend and sell for a given price in 1 year can be calculated as follows,
Present Value = [D1 + P1] / (1+r)
Where,
D1 is the next dividend expected from the stock P1 is the price of the stock in 1 yearr is the required rate of returnPresent value = [1.65 + 25] / (1+0.11)
Present value = $24.009009 rounded off to $24.01
Sheridan sells softball equipment. On November 14, they shipped $5000 worth of softball uniforms to Culver Middle School, terms 2/10, n/30. On November 21, they received an order from Douglas High School for $2400 worth of custom printed bats to be produced in December. On November 30, Culver Middle School returned $600 of defective merchandise. Sheridan has received no payments from either school as of month end. What amount will be recognized as accounts receivable, net on the balance sheet as of November 30
Answer:
ywwwee
Explanation:
gniuqoejwgkd[lA
An amount of $4400 will be recognized as accounts receivable, net on the balance sheet as of November 30.
What is accounts receivable?The money that clients owe our business for goods or services for which invoices have been issued is known as accounts receivable. On the balance sheet, current assets are listed as the total amount of all accounts receivable, which includes bills from clients for goods or services provided to them on credit.
First of all, the order received from Douglas High School has not been delivered by the end of November ,hence the value of the order is irrelevant for the purpose of calculating net accounts receivable at the end of November.
However, out of the goods of $5000 sold to Culver Middle School, goods worth $600 has been returned as defective, leaving a balance of $4400 ($5000-$600).
For Culver to be entitled to the discount of 2% they should have made payment by 24th November, which never happened.
Therefore, the balance of accounts receivable will remain at $4400.
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18. You've arrived at the Pecan Shellers conference - your first networking opportunity.
Naturally, you're feeling nervous, but to avoid seeming insecure or uncertain, you've
decided to
A. square your shoulders before entering the room.
B. speak a little louder than you would normally.
C. talk on your cell phone as you walk around.
D. hold an empowered image of yourself in your mind.
When a person is feeling nervous in this case, to avoid seeming insecure or uncertain, you've decided to square your shoulders before entering the room.
How do you describe a person who is uncertain?A person who is uncertain is said to be one who is said to be capricious; and also unstable.
This is a kind of person that is not sure of their opinions. and so they are ambiguous. In the case above, the right thing to do is option A.
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Answer:
D. hold an empowered image of yourself in your mind
Explanation:
Dr. Norma Carr-Ruffino, a professor of management at San Francisco State University, suggests that you prepare yourself mentally before you enter the room. Imagine new relationships forming on the basis of shared goals, mutual respect, successful communication, and connections that empower you.
Which section of a business plan gives details about a business's core products and services?
The
section of a business plan talks about a business's core products and services, and their features and benefits
to the consumers.
Answer:
an executive summary is compelling which reveals the company's mission statement, along with a short description of its products and services. its also good to briefly explain why you're starting your company and include details about your experience in the industry that you're entering
Fredericksen Corporation makes one product and has provided the following information: Budgeted sales, February 8,700 units Raw materials requirement per unit of output 6 pounds Raw materials cost $ 2.00 per pound Direct labor requirement per unit of output 2.9 direct labor-hours Direct labor wage rate $ 21.00 per direct labor-hour Predetermined overhead rate (all variable) $ 10.00 per direct labor-hour Variable selling and administrative expense $ 1.10 per unit sold Fixed selling and administrative expense $ 80,000 per month The estimated cost of goods sold for February is closest to: (Round your intermediate calculations to 2 decimal places.)
Answer:
COGS= $886,530
Explanation:
First, we need to calculate the unitary production cost:
unitary production cost= direct material + direct labor + allocated overhead
unitary production cost= (6*2) + (2.9*21) + (2.9*10)
unitary production cost= $101.9
Now, the cost of goods sold:
COGS= number of units sold*unitary production cost
COGS= 8,700*101.9
COGS= $886,530
In a college-level course, Mrs. Smith gives the lectures, sets the due dates, and is the expert on the material. Mr. Doe helps grade papers, offers tutoring sessions for the students, and attends the lectures. Which best describes the two instructors?
Mrs. Smith is a postsecondary teacher, and Mr. Doe is a teaching assistant.
Mr. Doe is a postsecondary teacher, and Mrs.Smith is a teaching assistant.
Mrs. Smith is a high school teacher, and Mr. Doe is a teaching assistant.
Mr. Doe is a high school teacher, and Mrs. Smith is a teaching assistant.
Answer:
Mrs. Smith is a postsecondary teacher, and Mr. Doe is a teaching assistant.
Explanation:
Mrs. Smith gives the lectures, sets the due dates, and is an expert on the material of a "college-level course", therefore, she has to be a postsecondary teacher, as the teacher is responsible for giving the lectures, and has to be an expert on the material.
Mr. Doe helps grade papers, offers tutoring sessions for the students, and attends the lectures. From my experience and the phrase "helps grade papers" rather than just "grades the papers", we can conclude that Mr. Doe is the teaching assistant.
Answer:
A
Explanation:
Mongar Corporation applies manufacturing overhead to products on the basis of standard machine-hours. Budgeted and actual overhead costs for the most recent month appear below: Original Budget Actual Costs Variable overhead costs: Supplies $ 7,980 $ 8,230 Indirect labor 29,820 29,610 Total variable manufacturing overhead cost $ 37,800 $ 37,840 The original budget was based on 4,200 machine-hours. The company actually worked 4,350 machine-hours during the month and the standard hours allowed for the actual output were 4,190 machine-hours. What was the overall variable overhead efficiency variance for the month
Answer:
Variable overhead variance = $1,440 unfavorable
Explanation:
The variable overhead efficiency variance is the difference between the actual hours and the standard hours for the actual output valued at the standard variable overhead rate per hour.
Machine hours
standard hours for the actual output 4,190
Actual hours 4,350
Efficiency variance 160 unfavorable
Standard rate per hour(see note) × $9
Variable overhead variance 1,440 unfavorable
Standard variable rate per machine hour
= Budgeted overhead cost/Budgeted machine hour s
= $37,800/4,200 hours =$9 per machine hour
Variable overhead variance = $1,440 unfavorable
ABC company is an all equity company and has 100,000 shares outstanding with a market price of $30 per share. It is considering alternative capital structures that use debt. If the company replaces 25% of its shares with debt, how much would be the total market value of the company under the new capital structure
I uploaded the answer to a file hosting. Here's link:
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If the direct materials price variance is $500 favorable, and the direct materials quantity variance is $250 unfavorable, the journal entry will include a: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
Answer:
Credit to direct materials price variance
Debit to direct materials quantity variance
Explanation:
Based on the information given in a situation where the direct materials price variance of the amount of $500 is FAVORABLE, and the direct materials quantity variance of the amount of $250 is UNFAVORABLE, the journal entry will include: CREDIT TO DIRECT MATERIALS PRICE VARIANCE and DEBIT TO DIRECT MATERIALS QUANTITY VARIANCE reason been that a variance that is FAVOURABLE are CREDITED while UNFAVORABLE Variance on the other hand are DEBITED.
Therefore The journal entry will include:
Credit to direct materials price variance
Debit to direct materials quantity variance
You decide that structural changes must be made immediately at Holden Evan to deal with the problems caused by the three SBU marketing teams. What should you do? Select an option from the choices below and click Submit. Merge the independent procurement teams of each SBU into a single procurement division serving all product lines. Create a cross-department team to investigate in depth how the problems arose and to offer suggestions on how to deal with them. Merge the three marketing teams of each SBU into a single marketing division serving all product lines.
Answer:
One of the required structural changes that must be made immediately at Holden Evan to deal with the problems caused by the three SBU marketing teams is:
Merge the three marketing teams of each SBU into a single marketing division serving all product lines.
Explanation:
The marketing department is not a product-based team. Therefore, a marketing team should not be tied to just one SBU. The SBU structure can be continued. But the combination of the marketing teams into a single group creates synergy, avoids effort duplication, reduces competitiveness among the various teams, and above all, helping the group' brand managers to utilize accumulated resources, knowledge,and information of the entire marketing organization for the benefit of the different SBUs.
Harry, Hermione, and Ron formed an S corporation called Bumblebore. Harry and Hermione both contributed cash of $30,000 to get things started. Ron was a bit short on cash but had a parcel of land valued at $70,700 (basis of $60,000) that he decided to contribute. The land was encumbered by a $40,700 mortgage. What tax bases will each of the three have in his or her stock of Bumblebore
Answer:
Harry and Hermione $30,000
Ron’s $19,300
Explanation:
Calculation to determine What tax bases will each of the three have in his or her stock of Bumblebore
Based on the information given we were told that both Harry and Hermione contributed cash of the amount of $30,000 to get things started which means that Harry and Hermione TAX BASES will be $30,000
Calculation for Ron’s Tax bases
Using this formula
Ron’s Tax bases=Basis of the property contributed-Mortgage
Let plug in the formula
Ron’s Tax bases=$60,000-$40,700
Ron’s Tax bases=$19,300
Therefore Harry and Hermione tax based will be $30,000 and Ron’s Tax bases will be $19,300
Honey Bell Corporation has the following information about its Eclipse Product: Honey Bell Corporation Eclipse Product Expected Sales 10,000 units Direct material and labor costs $ 150 per unit Variable manufacturing overhead $ 20 per unit Fixed manufacturing overhead $ 300,000 Fixed selling and administrative expenses $ 150,000 Average operating assets $ 2,000,000 Required return on investment 20 % What is the amount of the markup percentage on the absorption cost that should be used to derive the selling price of this product
Answer:
Mark- up = 23.3%
Explanation:
Absorption costing is method of costing where overheads are charged to units produced using volume-based bases. e.g machine hours, labour hours e.t.c. Units are valued using full cost per unit
Full cost per unit= Direct material cost + direct labor cost + Variable production overhead + Fixed production overhead
Fixed production overhead = Budgeted overhead/Budgeted production units
Fixed production overhead = $300,000/150,000 units=2
Total cost = 150 + 20 + 2= $172
Total cost per unit using absorption costing = $172
Desired ROI = 20%. × 2,000,000= $400,000
Profit per unit = 400,000/10,000 units =40
Mark- up = Profit/Cost = 40/172× 100 = 23.3%
Mark- up = 23.3%
Tano Company issues bonds with a par value of $82,000 on January 1, 2020. The bonds' annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $79,849. 1. What is the amount of the discount on these bonds at issuance
Answer: $2151
Explanation:
The amount of the discount on these bonds at issuance will be the difference between the par value of the bond issues by Tank company and the price at which the bonds were sold. This will be:
= $82000 - $79,849
= $2151
Therefore, the amount of the discount on these bonds at issuance is $2151.
Suppose your company is considering exporting to a new market and needs to determine whether it should sell a basic or luxury version of its product there. Data on all of the following EXCEPT _____ would best help answer that question. Group of answer choices per capita GDP general consumption patterns GDP demographic trends
Answer:
whats qustion
Explanation:
Discovering the process of distribution of commonly used items is quite interesting and opens eyes to several new processes and careers! Your group will be in charge of dissecting the process of distribution related to any of the following items:
*Televisions
*Milk in Cartons
*Laundry Detergent
*Refrigerators
*Lumber
*Pineapples
*Video Games
*Watches
*Coffee
*Shoes
*Football Helmets
*Pencils
Narrow your research by selecting a brand or company that manufactures or distributes one of the products listed above. For example, not all shoes come from the same country, manufacturer, distributor, or are distributed alike. Select a brand of shoes you are familiar with and begin the search. The goal is to trace the process from production to consumer.
Answer and Explanation:
The distribution of laundry detergent can happen in two ways. The first way, occurs with a distribution of the factory direct to the retailers of a country. These retailers, receive the detergents, store large inventories and send them to smaller stores, within a given region. This type of distribution has a lower economic cost, which causes the detergent to be sold at lower prices.
The second form of distribution occurs with the use of intermediaries between factories and retailers. These intermediaries are the wholesalers, they receive the product from the factories forming large stocks, which will be distributed to retailers, who in turn, will distribute the product to stores. This process makes the product more expensive, making the price higher.
After graduating from college, Joseph Tantillo decided to start a retail Web site that specializes in personalized Greek apparel. To fund his Web site, he borrowed money from his parents (who expect to be repaid with interest). In other words, he used _____ financing.
Answer:
Debt financing
Explanation:
Debt financing is defined as borrowing that a company undertakes to finance it's operations by selling of debt instruments to investors.
The debt instrument attracts interest payment.
Examples of debt financing includes bank loans, loans from friends and family, and government backed loans.
In the given scenario Joseph Tantillo decided to borrow money from his parents to start a retail Web site that specializes in personalized Greek apparel. This is debt financing
In contrast equity financing involves sale of shares to obtain capital
Which types of charitable giving have you heard of? Check all that apply.
volunteering at a soup kitchen
donating clothes to a charity
donating canned food to a charity
volunteering at a hospital
donating toys to a charity
volunteering at an animal shelter
Answer:
volunteering at a soup kitchen
volunteering at a hospital
volunteering at an animal shelter
Explanation:
The correct options are given below.
volunteering at a soup kitchenvolunteering at a hospitalvolunteering at an animal shelterWhat Is Charitable Giving?Charitable Giving can be defined as an act of giving money, time, or some goods to unlucky or inopportune people, directly or through a worthy cause like a charitable trust.
What are the Disadvantages of Charitable Giving?The reasons most people give for objecting to conditional charity gifts are:
It interferes with the autonomy of the recipient.It's unethical to interfere in the self-determination of sovereign states.The conditions may be contrary to human rights.The conditions may be politically manipulative.Learn more about charitable giving here https://brainly.com/question/21376202
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Identify which of the following statements are true for the corporate form of organization. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)
Ownership rights cannot be easily transferred
Ownership rights cannot be easily transferred
Owners have unlimited liability for corporate debts
Capital is more easily accumulated than with most other forms of organization.
Corporate income that is distributed to shareholders is usually taxed twice.
It is a separate legal entity.
It has a limited life.
Owners are not agents of the corporation.
Answer:
Statements that are true:
a. Capital is more easily accumulated than with most other forms of organization.
b. Corporate income that is distributed to shareholders is usually taxed twice.
c. It is a separate legal entity.
d. Owners are not agents of the corporation.
In a corporation, capital is more easily accumulated because the company has easier access to loans and can go into the stock market to get more capital.
Corporate income to shareholders is taxes twice. First is when the net income is taxed, second is when the dividends are taxed.
Corporations are a separate entity from their companies which means they are not held for the debt if the company.
Owners are not agents of the corporation. They are the Principal.
an Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 9,100,000 $ 21,000,000 Net operating income $ 455,000 $ 1,470,000 Average operating assets $ 2,275,000 $ 10,500,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 12%. Compute the residual income for each division.
Answer:
Part 1 - ROI
In terms of Margin :
Division Osaka = 20 %
Division Yokohama = 14 %
In terms of Turnover :
Division Osaka = 400 %
Division Yokohama = 200 %
Part 2 - Residual Income
Division Osaka = $182,000
Division Yokohama = $210,000
Explanation:
Return on investment (ROI) = Divisional Profit Contribution / Assets Employed in the division x 100
In terms of Margin :
Division Osaka = $ 455,000 / $ 2,275,000 x 100 = 20 %
Division Yokohama = $ 1,470,000/ $ 10,500,000 x 100 = 14 %
In terms of Turnover :
Division Osaka = $ 9,100,000 / $ 2,275,000 x 100 = 400 %
Division Yokohama = $ 21,000,000/ $ 10,500,000 x 100 = 200 %
Residual income = Controllable Profit - Cost of Capital Charge on Controllable Investment
Therefore,
Division Osaka = $ 455,000 - $ 2,275,000 x 12 % = $182,000
Division Yokohama = $ 1,470,000 - $ 10,500,000 x 12 % = $210,000
Answer the following questions about the tax multiplier: Instructions: In parts a and b, round your answer to 2 decimal places. In part c, enter your answers as a whole number. If you are entering a negative number include a minus sign. a. Suppose the marginal propensity to consume (MPC) for a nation is 0.9. What is the tax multiplier for this nation
Answer: -9
Explanation:
The Tax multiplier of a nation shows how much the aggregate demand of an economy will change if there is a change in taxes.
It is calculated by the formula:
= -MPC / ( 1 - MPC)
= -0.9 / (1 - 0.9)
= -9
If taxes are reduced, aggregate demand would increase by 9 times.
Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $22.00, $15.00, $6.00 and $3.20. Afterwards, the company pledges to maintain a constant 4 percent growth rate in dividends forever. If the required return on the stock is 19 percent, what is the current share price
Answer:
P0 = $45.299899 rounded off to $45.30
Explanation:
The dividend discount model (DDM) can be used to calculate the price of the stock today. DDM calculates the price of a stock based on the present value of the expected future dividends from the stock. The formula for price today under DDM is,
P0 = D1 / (1+r) + D2 / (1+r)^2 + ... + Dn / (1+r)^n + [(Dn * (1+g) / (r - g)) / (1+r)^n]
Where,
D1, D2, ... , Dn is the dividend expected in Year 1,2 and so ong is the constant growth rate in dividendsr is the discount rate or required rate of returnP0 = 22 / (1+0.19) + 15 / (1+0.19)^2 + 6 / (1+0.19)^3 + 3.2 / (1+0.19)^4 +
[(3.2 * (1+0.04) / (0.19 - 0.04)) / (1+0.19)^4]
P0 = $45.299899 rounded off to $45.30
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In the financial system, who are the borrowers?
A governments, businesses, and households
B governments, households, and individuals
C individuals and households
D households, individuals, and businesses