Apple Inc. just paid a dividend of $3 per share. You expect that Apple's dividend will increase at the rate of 10% per year for the next 10 years. After that, you expect that Apple Inc. will increase its dividend at the rate of 3% per year forever. The required rate of return for Apple is 20%. What is the price of Apple just after the current dividend was paid?

Answer:

The price of Apple just after the current dividend was paid is $26.79.

Explanation:

Note: See the attached file for the calculation of present values for year 1 to 10 dividends.

From the attached excel file, we have:

Previous year dividend in year 1 = Dividend just paid = $3

Total of dividends from year 1 to year 10 = $19.17617169980840

Year 10 dividend = $7.781227380

Therefore, we have:

Year 11 dividend = Year 10 dividend * (100% + Perpetual dividend growth rate) = $7.781227380 * (100% + 3%) = $8.0146642014

Price at year 10 = Year 11 dividend / (Rate of return - Perpetual dividend growth rate) = $8.0146642014 / (20% - 3%) = $47.1450835376471

PV of price at year 10 = Price at year 10 / (100% + Required return)^Number of years = $47.1450835376471 / (100% + 20%)^10 = $7.61419419713817

Price of Apple = Total of dividends from year 1 to year 8 + PV of price at year 10 = $19.17617169980840 + $7.61419419713817 = $26.79

Which of the following industries is most likely to outsource jobs to another country because of slight increases in labor costs?

a. Milk dairy.
b. High-tech research facility.
c. Textile plant.
d. Automobile assembly plant.

a company acquired a truck for 130,000 residual value was estimated to be $20,000 the truck can be driven for 50,000 miles or a useful life of four years. Actual usage of the truck was recorded as 10,000 miles for the first year. What is the amount of depreciation expesne for the first year calculated by the double

Decide whether each of the following is frictional, structural, or cyclical unemployment:
a. The economy gets worse, so General Motors shuts down a factory for four months, laying off workers. cyclical structural frictional
b. General Motors lays off 5,000 workers and replaces them with robots. The workers start looking for jobs outside the auto industry. cyclical structural frictional
c. About 10 workers per month at a General Motors plant quit their jobs because they want to live in another town. They start searching for work in the new town.

Consider the following situations. What is the effect on consumption for each of the four scenarios? Either move the consumption function when appropriate or move the point along the consumption function to illustrate the impact of each scenario. You should move only the point or only the line in each part of the question. a. The federal government raises taxes. Consumption Income b. Housing prices increase. Consumption Income c. Consumer incomes rise. Consumption Income d. Consumer expectations of their future income plummet. Consumption Income

Negotiations often involve three types of issues. For ______________ issues, the parties' preferences are directly opposed. For ______________ issues, the parties have directionally-opposed preferences but value the issues differently. For ______________ issues, the parties have the same preferences.

On January 1, Alan King decided to deposit $58,800 in a savings account that will provide funds four years later to send his son to college. The savings account will earn 8% annually. Any interest earned will be added to the fund at year-end (rather than withdrawn). (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Required:

The Fabricating Department started the current month with a beginning Work in Process inventory of $10,900. During the month, it was assigned the following costs: direct materials, $76,900; direct labor, $24,900; and factory overhead, 70% of direct labor cost. Also, inventory with a cost of $113,500 was transferred out of the department to the next phase in the process. The ending balance of the Work in Process Inventory account for the Fabricating Department is: Group of answer choices $83,461. $196,961. $68,030. $16,630. $112,700.

How does communication take place in the United States?

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Name one thing you're afraid of when you think of college and career.

Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in thousands) 2021 2022 2023 Subscription revenue recognized (earned) $ 350 $ 360 $ 320 Subscription payments received in cash 390 340 360 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future. Required: 1. What is the balance sheet account that gives rise to a temporary difference in this situation

An investment has the following characteristics: ATIRRP: After-tax IRR on total investment in the property: 9.0% BTIRRE: Before-tax IRR on equity invested: 17% BTIRRP: Before-tax IRR on total investment in the property: 12% t: Marginal tax rate: 0.40 What would be the break-even interest rate (BEIR), at which the use of leverage is neither favorable nor unfavorable

The amount of money that is earned on a deposit is​

Rainey Company's true cash balance at October 31 is $4,700. The following information is available for the bank reconciliation: Outstanding checks, $740 Deposits in transit, $540 Bank service charges, $110 The bank had collected an account receivable for Rainey Company, $1,200 The bank statement included an NSF check written by one of Ramsey's customers for $720. What was the unadjusted book balance at October 31

Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,400 models. During the month, the company completed 11,200 models, and transferred them to the Distribution Department. The company ended the month with 2200 models in ending inventory. There were 3000 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is being followed. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 55% complete as to conversion costs.


Beginning inventory​:

Direct materials costs $20,000
Conversion costs $11,100

Manufacturing costs added during the accounting period​:

Direct materials costs $70,700
Conversion costs $240,500

What is the amount of direct materials cost assigned to ending work-in-process inventory at the end of October?


a. $19,783
b. $20,337
c. $10,923
d. $14,916

Assume that a business has $50000 of current assets and $40000 of current liabilities. What is the company’s current ratio?

Use Annual Cost Analysis to determine whether Alternative A or B should be chosen. The analysis period is 5 years. Assume an interest rate of 6% per year, compounded annually Alternative A Alternative B Initial Cost 2800 6580 Annual Benefit 450 940 Salvage Value 500 1375 Useful Life (yrs) 5 5 Group of answer choices Alternative A should be chosen, because its initial cost is lower than Alternative B's Alternative A should be chosen, because its equivalent annual cost is $252.15 lower than Alternative B's Alternative B should be chosen, because its annual benefit is higher than Alternative A's Alternative B should be chosen, because its equivalent annual cost is $252.15 higher than Alternative A's

Suppose that you are considering the development of a residential subdivision. The development will require you to spend $300,000 today to acquire the land. You will also have to spend $750,000 in both years 1 and 2 in order to build the houses. You expect to make $1.5 million in year 3 and $2 million in year 4 from sales of the completed homes. What is the internal rate of return of this project

Suppose a firm produces with a technology that exhibits constant returns to scale at all levels of production. The firm's inputs are workers and laptops. The firm sells its output in a perfectly competitive market. It also hires its inputs (hires workers and rents laptops) in perfectly competitive markets. Assume that in the long run the firm produces y units of output using x1 workers and x2 laptops. If the firm doubles the amount of workers and laptops (using 2x1 and 2x2), we would expect the firm's long-run profits to

Marigold Corp. incurs the following costs to produce 10100 units of a subcomponent: Direct materials $8484 Direct labor 11413 Variable overhead 12726 Fixed overhead 16200 An outside supplier has offered to sell Marigold the subcomponent for $2.85 a unit. If Marigold could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by $838. $(3364). $6838. $(5929).

The following is the ending balances of accounts at June 30, 2021, for Excell Company.
Account Title Debits Credits
Cash $ 93,000
Short-term investments 75,000
Accounts receivable (net) 290,000
Prepaid expenses (for the next 12 months) 42,000
Land 85,000
Buildings 330,000
Accumulated depreciation—buildings $ 165,000
Equipment 270,000
Accumulated depreciation—equipment 125,000
Accounts payable 178,000
Accrued liabilities 50,000
Notes payable 110,000
Mortgage payable 240,000
Common stock 150,000
Retained earnings 167,000
Totals $ 1,185,000 $ 1,185,000
Additional information:
The short-term investments account includes $23,000 in U.S. treasury bills purchased in May. The bills mature in July, 2021.
The accounts receivable account consists of the following:
a. Amounts owed by customers $ 232,000
b. Allowance for uncollectible accounts—trade customers (18,000 )
c. Nontrade notes receivable (due in three years) 70,000
d. Interest receivable on notes (due in four months) 6,000
Total $ 290,000
The notes payable account consists of two notes of $55,000 each. One note is due on September 30, 2021, and the other is due on November 30, 2022.
The mortgage payable is a loan payable to the bank in semiannual installments of $4,800 each plus interest. The next payment is due on October 31, 2021. Interest has been properly accrued and is included in accrued expenses.
Eight hundred thousand shares of no par common stock are authorized, of which 300,000 shares have been issued and are outstanding.
The land account includes $55,000 representing the cost of the land on which the company's office building resides. The remaining $30,000 is the cost of land that the company is holding for investment purposes.

Miramar Industries manufactures two products, A and B. The manufacturing operation involves three overhead activities - production setup, material handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities:

Activity Cost Activity Base
Production Setup $250,000 Number of setups
Material Handling $150,000 Number of parts
General Overhead $80,000 Number of direct labor hours

Each productâs total activity in each of the three areas are as follows:

Product A Product B
Number of setups 100 300
Number of parts 40,000 20,000
Number of direct labor hours 9,000 12,000
What is the activity rate for General Overhead?
A. $4.00 per direct labor hour
B. $3.81 per direct labor hour
C. $6.71 per direct labor hour
D. $4.20 per direct labor hour

Elizabeth reports the following items for the current year: Nonbusiness capital gains $ 5,000 Nonbusiness capital losses (3,000) Interest income 3,000 Itemized deductions (including a $20,000 casualty loss in a Federal disaster area) (27,000) In calculating Elizabeth's net operating loss and with respect to these amounts only, what amount must be added back to taxable income (loss)

Sunland purchased the license for distribution of a popular consumer product on January 1, 2020, for $158,000. It is expected that this product will generate cash flows for an indefinite period of time. The license has an initial term of 5 years but by paying a nominal fee, Sunland can renew the license indefinitely for successive 5-year terms. What amount should be amortized for the year ended December 31, 2020

Harrelson Company manufactures pizza sauce through two production departments: Cooking and Canning. In each process, materials and conversion costs are incurred evenly throughout the process. For the month of April, the work in process accounts show the following debits.
Cooking Canning
Beginning work in process $0 $4,710
Materials 22,030 10,200
Labor 8,740 8,020
Overhead 32,760 28,340
Costs transferred in 55,850
ournalize the April transactions.

On average, your firm receives 65 checks a day from customers. These checks, on average, are worth $39.90 each and clear the bank in 1.5 days. In addition, your firm disburses 38 checks a day with an average amount of $89.50. These checks clear your bank in 2 days. What is the average amount of the collection float? $2,473.80 $3,401.00 $3,890.25 $5,101.50 $6,802.00

On April 1, Townsley Company sold merchandise with a selling price of $10,000 on account to Trout Company, with terms 3/10, n/30. On April 5, Trout Company returned merchandise with a selling price of $1,000. Trout Company paid the amount due on April 9. What journal entry did Townsley Company prepare on April 9 assuming the gross method is used

Setting and achieving goals is essential to success.

a. True
b. False

Suppose you are the money manager of a $5.21 million investment fund. The fund consists of four stocks with the following investments and betas: Stock Investment Beta A $ 320,000 1.50 B 780,000 (0.50) C 1,260,000 1.25 D 2,850,000 0.75 If the market's required rate of return is 10% and the risk-free rate is 5%, what is the fund's required rate of return

Compare and contrast the three most common types of healthcare indemnity plans.

A firm' s sales procedure involves preparing sales invoices based on shipping documents; posting the sales amounts to accounts receivable records; and posting quantities billed to the inventory records. Due to control weaknesses in the procedure, certain goods that are shipped may not be reflected in the sales invoices. The exposure from this risk can result in: