Kellogg Co. (K) recently earned a profit of $2.22 earnings per share and has a P/E ratio of 19.35. The dividend has been growing at a 6 percent rate over the past few years. If this growth rate continues.

Required:
a. What would be the stock price in four years if the P/E ratio remained unchanged?
b. What would the price be if the P/E ratio declined to 16 in four years?

Answers

Answer 1

Answer and Explanation:

The computation is shown below:

The following formula should be used

= P/E ratio × EPS × (1 + growth rate)^n umber of years

a. The stock price in four years is

= $19.35 × $2.22 × (1 + .06)^4

= $54.23

b. The stock price in four years in the case when the P/E ratio fall to 16

= $16 × $2.22 × (1 + .06)^4

= $44.84

We simply applied the above formula so that the correct price could come

And, the same is to be considered


Related Questions

Baker is single and earned $225,200 of salary as an employee in 2018. How much should his employer have withheld from his paycheck for FICA taxes? (Rounded to the nearest whole dollar amount)
A) $11,453
B) $10,861
C) $10,415
D) $15,892

Answers

Answer: $11,453

Explanation:

In 2008:

FICA-Social Security tax was payable at 6.2% of a limit of $128,400.

FICA-Medicare tax was payable at 1.45% of the total amount of $225,200.

Additional Medicare tax was payable on any amount in excess of $200,000 at 0.9%.

= (6.2% * 128,400) + (225,200 * 1.45%) + ( (225,200 - 200,000) * 0.9%))

= $11,453

An investor is bearish on a particular stock and decided to buy a put with a strike price of $44. Ignoring commissions, if the option was purchased for a price of $.93, what is the break-even point for the investor

Answers

Answer:

$43.07

Explanation:

Strike price of Put Option = $44

Option purchased price = $0.93

Break-even point for the investor = [Strike price - Put Option purchased price}

= $44 - $0.93

= $43.07

Therefore, the Break-even point for the investor is $43.07

How does money function as a medium of exchange?
A. It allows people to more easily buy and sell products
B. It holds its value over time or when transferred.
C It holds its value over time or when transterred
D. It has a value determnined by the government

Answers

Answer:

A

Explanation:

Prior to money people bartered goods

The money function as a medium of exchange as it  allows people to more easily buy and sell products.

What is a medium of exchange?

Any item that is commonly accepted in exchange for goods and services is referred to as a medium of exchange.

Currency or money is the most widely utilized medium of exchange in modern economies, and money serves as a medium of exchange by making it easier for people to buy and sell goods.

Therefore, option A is correct.

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The buck store is considering a project that will require additional inventory of 216,000 and will increase accounts payable by 181,000. accounts receivable are currently 525,000 and are expected to increase by 9% if this project is accepted. what is the projects initial cash flow for net working capital?
a. -$82,250b. -$12,250c. $12,250d. $36,250e. $44,250

Answers

Answer:

a. -$82,250

Explanation:

Calculation for what is the projects initial cash

flow for net working capital

Initial cash flow=-$216,000 + $181,000 - ($525,000 *0.09)

Initial cash flow=-$216,000 + $181,000 - $47,250

Initial cash flow = - $82,250

Therefore the projects initial cash

flow for net working capital will be - $82,250

On December 31, Strike Company traded in one of its batting cages for another one that has a cost of $500,000. Strike receives a trade-in allowance of $11,000. The old equipment had an initial cost of $215,000 and has accumulated depreciation of $185,000. Depreciation has been recorded up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss on this transaction

Answers

Answer:

the amount of loss is $19,000

Explanation:

The computation of the amount of the gain or loss is shown below:

Old equipment cost is

= Initial cost of the equipment - accumulated depreciation

= $215,000 - $185,000

= $30,000

Now the gain or loss is

= Book value of an equipment - trade in allowance

= $30,000 - $11,000

= $19,000

hence, the amount of loss is $19,000

We simply applied the above formula so that the correct value could come

And, the same is to be considered

An example of a poor study environment is a place with

a chair that has a strong back.
textbooks and other resources.
minimal talking and no background noise.
messy surfaces and a lot of movement.

Answers

Answer:

messy surfaces and a lot of movement

Explanation:

It will make you less focused

Answer:

D messy surfaces and a lot of movement.

Explanation:

Using the dividend growth model, explain why a firm would be hesitant to reduce the growth rate of its dividends.

Answers

Answer:

If a firm decreases its sustainable growth rate (g), the price of their stock will probably decrease. I will use the following example:

P₀ = Div₁ / (Re - g)

Div₁ = $2Re = 12%g = 5%

P₀ = $2 / (12% - 5%) = $28.57

if the growth rate g decreases to 2%, and the rest remains unchanged, then

P₀ = $2 / (12% - 2%) = $20

A firm has a capital structure with $14 in equity and $72 of debt. The cost of equity capital is 14.16% and the pretax cost of debt is 5.34%. If the marginal tax rate of the firm is 28.94% Compute the weighted average cost of capital of the firm.

Answers

Answer: 5.48%

Explanation:

Total capital = 14 + 72 = $86

Weight of equity = 14/86

Weight of debt = 72/86

WACC = (Weight of debt * Cost of debt * ( 1 - tax)) + (Weight of equity * cost of equity)

= (72/86 * 5.34% * (1 - 28.94%)) + (14/86 * 14.16%)

= 0.0317687776744186 + 0.02305116279

= 5.48%

Dragon makes all sales on account, subject to the following collection pattern: 30% are collected in the month of sale; 60% are collected in the first month after sale; and 10% are collected in the second month after sale. If sales for June, July, and August were $120,000, $160,000, and $220,000, respectively, what were the firm's budgeted collections for August and the company's budgeted receivables balance on August 31?

Answers

Answer: $174000

Explanation:

The firm's budgeted collections for August and the company's budgeted receivables balance on August 31 would be calculated as:

= (30% × $220,000) + (60% × $160,000) + (10% × $120,000)

= (0.3 × $220,000) + (0.6 × $160,000) + (0.1 × $120,000)

= $66000 + $96000 + $12000

= $174000

Marin Company's accounts receivable arising from sales to customers amounted to $131000 and $114000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $498000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

Answers

Answer:

$481,000

Explanation:

To determine the cash flows from operating activities, the net Income for the year must be adjusted by non - cash items and changes in working capital items.

Therefore, given a decrease in Accounts Receivable $17,000 ($131000 - $114000) . Then the cash flows from operating activities to be reported on the statement of cash flows is $481,000 ($498000 - $17,000) .

Your Boston-headquartered manufacturing company, Wruck Enterprises, obtained a 54-million-peso loan from a Mexico City bank last month to fund the expansion of your Monterrey, Mexico, plant. The exchange rate was 14 U.S. cents per peso when you took out the loan, but since then the exchange rate has dropped to 7 U.S. cents per peso. Has Wruck Enterprises made a gain or a loss due to the exchange rate change, and how much

Answers

Answer: 3.78 million dollars

Explanation:

Based on the information given in the question, the amount of money that Wruck Enterprises would pay when the exchange rate is 7 US cents per peso would be:

= 54-million × 7 cent

= 378,000,000 cent

= 3.78 million dollars

When the exchange rate was 14 U.S. cents per peso , the amount paid would have been:

= 54 million × 14 cent

= 756,000,000 cent

= 7.56 million dollars

Therefore, Wruck Enterprises made a gain of (7.56 million - 3.78 million) = 3.78 million dollars

12.Sunnydale Organics, Inc. harvests crops in roughly 90-day cycles based on a 360-day year. The firm receives payment from its harvests sometime after shipment. Due in part to the firm's rapid growth, it has been borrowing to finance its harvests using 90-day bank notes on which the firm pays 12 percent discount interest. If the firm requires $60,000 in proceeds from each note, what must be the face value of each note

Answers

Answer: $61857

Explanation:

Let the face value of each note be represented by y.

We should also note that we are given a time period of 90 days = 3 months.

Discount interest = 12%. This will be 3% for every 3 months.

Face value of each nite will then be:

y = 60000/(100%-3%)

y = 60000 / 97%

y = 60000/0.97

y = 61,856.67

We discussed the invasions of the Roman world by various Germanic tribes in the fifth century and the Arab-Islamic conquests of Persia, most of the Byzantine Empire, and much of the Mediterranean world in the seventh and eighth centuries. How did the new invaders manage to govern the advanced civilizations that they conquered?

Answers

Answer:

The invaders were able to govern the more advanced civilizations because they adopted most of the conquered civilizations' customs, rules of governance, and even languages and religion.

For example, in the case of the Germanic tribes that conquered the Western Roman Empire, the rulers adopted, one by one, the religion of the Roman Empire: Christianity, more specifically, the Roman Catholic variant.

They also began to use the language of the Empire: Latin, for ecclessiastical and political matters, and while political institutions did change a lot, some of the political institutions of the Empire did survive in the sucessor states that the Germanic rulers carved out of the Roman territory.

Nikoto Steel Co. budgeted manufacturing costs for 50,000 tons of steel are:Fixed manufacturing costs $50,000 per monthVariable manufacturing costs $12.00 per ton of steelNikoto produced 40,000 tons of steel during March. How much is the flexible budget for total manufacturing costs for March?a) $520,000b) $650,000c) $480,000d) $530,000

Answers

Answer:

d) $530,000

Explanation:

The computation of the total manufacturing cost for the march month is shown below

= Fixed manufacturing cost + (produced tons × variable manufacturing cost per ton)

= $50,000 + (40,000 Tons × $12.00 per ton)

= $50,000 + $480,000

= $530,000

hence, the total manufacturing cost for the march month is $530,000

Therefore the correct option is d.

In September 2008, the stock market fell sharply and continued to perform poorly due to the financial crisis. How did this change impact GDP in the economy?

Answers

Answer:

Many people's wealth is held in stocks and as the price of stocks collapsed, they lost wealth.

Imagine that this happened to you. One day you are rich and that affects your spending habits. In a matter of few days or weeks, you lose a large portion of your wealth. So now, you are less rich or even poor. So your spending habits will be altered, i.e. you will spend less.

If you consider the economy as a whole, aggregate demand will fall, resulting in a decrease of aggregate supply, and an overall decrease of the GDP.

A firm has a tax burden of 0.6, a leverage ratio of 1.2, an interest burden of 0.7, and a return-on-sales ratio of 14%. The firm generates $2.64 in sales per dollar of assets. What is the firm's ROE

Answers

Answer:

18.63%

Explanation:

Calculation for the firm's ROE

Using this formula for

ROE=(Tax burden)(Leverage ratio)(Interest burden)(Return-on-sales ratio)(Sales per dollar of assets)

Let plug in the formula

ROE = (.6)(1.2)(.7)(.14)(2.64)

ROE=18.63%

Therefore the firm's ROE is 18.63%

What are the differences between the five-stage model of team development and the punctuated equilibrium model?

Answers

Answer: The five stage model of a team Development include; forming, storming, norming, performing and adjourning, Punctuated Equilibrium, suggest there are no steps, just 2 phases during research.

Explanation:

The five stage model of a team Development include; forming, storming, norming, performing and adjourning.

Forming involves acquittance with the members, understand scope of the project and establish good relationships.

Storming involves members accepting they're part of the project group and resist constraint on individualism.

In norming, the group establishes how they can work together.

Performing is being functional

Adjsuting, the team prepares for high disbandment

Punctuated Equilibrium, suggest there are no steps, just 2 phases during research.

Which of the following scenarios BEST illustrates the role of money as a medium of exchange?

A
Jane writes a $600 check to pay her rent.
B
Jane has a $500 balance on her credit card.
C
Jane puts 5% of her income into savings each month.
D
Jane uses her investments as collateral for a business loan.

Answers

Answer:it’s A

Explanation: I just took a test with this question

Scenarios that best illustrates the role of money as a medium of exchange is Jane writes a $600 check to pay her rent. Option (a) is correct.

What do you mean by Exchange?

Giving or receiving something in exchange for another is known as an exchange.

As a means of exchange, money makes transactions for goods and services easier. Producers trade money for the products they sell to wholesalers. Retailers then sell the goods to consumers in exchange for money from wholesalers, who in turn sell their products to them.

The first function of money is that it is a medium of trade, which implies that it works as a go-between for buyers and sellers. The accountant now trades accounting services for money instead of shoes when they were first introduced.

Therefore, Option (a) is correct. Scenarios that best illustrates the role of money as a medium of exchange is Jane writes a $600 check to pay her rent.

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Pepe, Incorporated acquired 60% of Devin Company on January 1, 2018. On that date Devin sold equipment to Pepe for $45,000. The equipment had a cost of $120,000 and accumulated depreciation of $66,000 with a remaining life of 9 years. Devin reported net income of $300,000 and $325,000 for 2018 and 2019, respectively. Pepe uses the equity method to account for its investment in Devin.What is the consolidated gain or loss on equipment for 2018

Answers

Answer: $9000

Explanation:

Based on the values given in the question, the consolidated gain or loss on equipment for 2018 would be calculated as:

Cost of equipment = $120,000

Less accumulated depreciation = $66,000

Less: Amount Devin sold equipment to Pepe = $45,000

Consolidated loss= $120,000 - $66000 - $45000

= $9000

In the domestic market, following the imposition of a voluntary quota, imports ________, domestic production ________, and prices ________.

a. increase; decreases; decrease
b. decrease; decreases; increase
c. decrease; increases; increase
d. increase; increases; increase
e. decrease; increases; decrease

Answers

Answer:

c. decrease; increases; increase

Explanation:

In the case of the domestic market, the import quota would be considered as an upper limit where the country could import

Now when the import quota would imposed so the import would decreased, the domestic production would increased and the price is also increased

hence, the correct option is c

And, the rest of the options are incorrect

The ______ approach to civility argues that it is better to be polite and courteous and observe the norms of a given culture because it reduces the potential for suffering and violence.

a. agitation
b. engagement
c. invitational
d. disobedience

Answers

Answer:

c. invitational

Explanation:

The two basic approaches to civility are the invitational and the confrontational differ in that the invitational approach argues in favor of politeness and good manners, and following the norms of the foreign (or other) culture. Silence and reflection are a trait of the invitational approach.

The invitational and confrontational methods to civility differ in that the invitational approach advocates for politeness and good manners, as well as adhering to the standards of the foreign (or other) culture.

The invitational method is characterized by silence and reflection.

So, Option C is the correct approach.

The other Options are incorrect as:

Option A is incorrect as Informant ratings, observational methods, and technology instruments are all used to assess agitation.

Option B is incorrect as Engagement is a continuous process that presupposes "important" stakeholders will be involved from the start of a project or policy to its implementation and subsequent review.

Option D is incorrect as Disobedience is intentionally refusing to do what someone in authority tells you to do or what a rule or law says you should do.

Thus Option C is the correct approach for the following question.

For more information about the invitational approach refer to the link:

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help can someone solve this ?​

Answers

Answer:

4;BD

Explanation:

IT like saying that when his income was zero his consumption was zero so F is zero for income, B is zero for consumption

In general, value-creating diversification of General Electric under Jack Welch was:________
a) Economies of scope
b) Economies of scale
c) Market power
d) Financial economies
e) Brand loyalty

Answers

Answer:

b) Economies of scale

Explanation:

In general, value-creating diversification of General Electric under Jack  Welch was  Economies of scale.

He shut down factories, set workers loose, and offered a promise of "growing rapidly in a slow growth economy," titled a speech he made in 1981 shortly after he became President.

This period of mass restructuring gave him the surname of Neutron Jack when he took people out, much like a neutron bomb as he left the houses.

True or False: According to economic theory, because coupons are free, people who do not clip coupons are behaving irrationally.

Answers

Answer: false

Explanation:

The coupons are a type of promo code that is used for shopping or when buying a ne product or an item of sale. There are various sorts of coupons such as those of the households, personal care, and grocery coupons,

As per the economic theory people who don't clip the coupons that are free dint behave rationally is false. As coupons is a sort of discount rate that is only applicable to the specific items and has serval conditions.

Hence the option is False.

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Vaughn Company made a purchase of merchandise on credit from Ivanhoe Company on August 8, for $8900, terms 2/10, n/30. On August 17, Vaughn makes the appropriate payment to Ivanhoe. The entry on August 17 for Vaughn Company is: Accounts Payable 8900 Purchase Returns and Allowances 178 Cash 8722 Accounts Payable 8900 Cash 8900 Accounts Payable 8722 Cash 8722 Accounts Payable 8900 Inventory 178 Cash 8722

Answers

Answer:

Accounts Payable 8900 Inventory 178 Cash 8722

Explanation:

The journal entry is shown below:

Accounts payable $8,900  

       To inventory             $178  ($8,900 × 2%)

       To Cash                    $8,722

(Being the payment is recorded)

Here the account payable is debited as it decreased the liabilities and the inventory and cash is credited as it also decreased the assets

Therefore the last option is correct

In 2010, the $471 billion deficit on the U.S. current account was offset by a surplus of $255 billion on financial account. This difference is the result of:_________.
A. budget deficit.
B. statistical discrepancy.
C. trade deficit.
D. national debt.

Answers

Answer:

B. statistical discrepancy.

Explanation:

Since it is mentioned that the $471 million represents the deficit in the US current account i.e. counterbalanced by a surplus of $255 billion

So here the difference represents the statistical discrepancy

Therefore as per the given situation, the correct option is B

And, the rest of the options are wrong

Exeter has a materials standard of 1 pound per unit of output. Each pound has a standard price of $25 per pound. During July, Exeter paid $138,000 for 5,040 pounds, which it used to produce 4,780 units. What is the direct materials price variance?

Answers

Answer:

$19,595 unfavorable

Explanation:

The computation of direct material price variance is shown below;

= (Actual price - Standard price) × Actual quantity used

Given that;

Actual price = $138,000/4,780 units

= $28.87 × 1 pound

= $28.87 per pound

Actual quantity used = 4,780 units

Standard price = $25 per pound

= ($28.87 per pound - $25 per pound) × 4,780 units

= ($3.87 per pound) × 5,040 pounds

= $19,595 unfavorable

The direct material price variance is unfavorable because actual price is more than standard price.

During periods of decreasing costs, the use of the LIFO method of costing inventory will result in a lower amount of net income than would result from the use of the FIFO method.
a. True
b. False

Answers

Answer:

b. False

Explanation:

LIFO stand for Last in First Out. This means LIFO inventory valuation is based on earlier goods purchased.

So, when costs are decreasing, they are affecting latter prices and this usually affect FIFO (First in First Out) not LIFO.

Kim's Bridal Shoppe has 10,200 shares of common stock outstanding at a price of $36 per share. It also has 215 shares of preferred stock outstanding at a price of $87 per share. There are 520 bonds outstanding that have a coupon rate of 5.5 percent paid semiannually. The bonds mature in 17 years, have a face value of $1,000, and sell at 93 percent of par. What is the capital structure weight of the common stock?

Answers

Answer:

26.43 %

Explanation:

The Capital Structure is based on  the Market Weight of the Sources of Finance as shown below :

Equity market value = Number of shares × price/share

Equity market value  = 10,200 ×  $36

Equity market value = $367,200

Current debt value = Number of bonds × price/bond

Current debt value = 520 × (1930)

Current debt value = $1,003,600

Preferred stock value = Number of shares × price/share

Preferred stock value = 215 ×  $87

Preferred stock value = $18,705

Total capital = Common equity value + Debt value + Preferred stock value

Total capital = $367,200 + $1,003,600 + $18,705

Total capital = $1,389,505

Weight of Equity = Equity value / Total capital

Weight of Equity  = $367,200 / $1,389,505

Weight of Equity = 26.43 %

Bramble Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 4 boxtops from Bramble Frosted Flakes boxes and $2. The company estimates that 60% of the boxtops will be redeemed. In 2021, the company sold 809000 boxes of Frosted Flakes and customers redeemed 352000 boxtops receiving 88000 bowls. If the bowls cost Bramble Company $4 each, how much liability for outstanding premiums should be recorded at the end of 2021

Answers

Answer: $66700

Explanation:

Number of boxtops that was sold = 809000

Estimated boxtops to be redeemed = 809,000 × 60% = 485400

Less: Boxtops received = 352000

Estimated boxtops not received yet = 133400

The number of boxtops that will be needed per bowl will then be:

= 133400 / 4

= 33350

Therefore, liability for outstanding premiums that should be recorded at the end of 2021 would be:

= 33350 × ($4 - $2)

= 33350 × $2

= $66700

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