Reference no: EM131187889
Morrison Tobacco Co. just paid a dividend of $3.11 per share. The company is in a state of decline, decreasing its dividend by 20 percent next year, 15% the year after that, 10% the year following until it reaches the industry average of -5 percent dividend growth, after which the company will keep a constant growth rate forever. If the market price of Morrison stock is $21.55, what is the required return on the shares?
|
Provide the journal entry needed after one year
: In order to expand business, the management of Vereos Inc. decided to issue long term notes payable for $50,000. The note will be paid over ten years with payments of $5,000 plus 12% interest. Provide the journal entry needed after one year for the f..
|
|
What is the yield-to-maturity if an investor pays
: Calculate the price of a 5 year, 9.5% bond that is being priced to yield 12%. The par value is assumed to be $1,000. Before any calculation, what is the price of this bond in relation to par value? How do we know? Finally, what is the yield-to-maturi..
|
|
What is margin of safety
: Swimkids is a swimsuit manufacturer. They sell swim suits at a selling price is $30 per unit. Swimkids variable costs are $18 per unit. Fixed costs are $82,300. Swimkids expects sales of $270,600 next year. What is Swimkids's margin of safety?
|
|
Submitted bids to develop a new video display technology
: Two competing companies have submitted bids to develop a new video display technology. The yearly development cost of Alpha expressed in actual dollars will be $150,000 the first year and increase by 5% per year over the five year contract.
|
|
What is the required return on the shares
: Morrison Tobacco Co. just paid a dividend of $3.11 per share. The company is in a state of decline, decreasing its dividend by 20 percent next year, 15% the year after that, 10% the year following until it reaches the industry average of -5 percent d..
|
|
Using the double declining balance method for depreciation
: The Big Deal Company has purchased new furniture for their offices at a retail price of $100,000. An additional $20,000 has been charged for insurance, shipping and handling. The company expects to use the furniture for 8 years (useful life = 8 years..
|
|
The purchase of a large stamping machine
: Your company is contemplating the purchase of a large stamping machine. The machine will cost $180,000. With additional transportation and installation costs of $5,000 and $10,000, respectively, the cost basis for depreciation purposes is $195,000. T..
|
|
What is the book value at the end of six year
: Carson Brewing has purchased a hop harvesting machine for $125,00. Delivery charges were $10,000 and installation costs were $15,000. Carson brewing expects to use the machine for 10 years (10 year useful life) and then sell it for a market (salvage)..
|
|
Impact on current-net working capital to total assets ratio
: A company has current assets of $600,000, fixed assets of $500,000, current liabilities of $350,000, inventory of $300,000, and long-term debt of $500,000. If inventory decreases by $100,000 and current liabilities remain the same, what will be the i..
|