The current price of a stock is $65.88. If dividends are expected to be $1 per share for the next five years, and the required return is 10%, then what should the price of the stock be in 5 years when you plan to sell it? If the dividend and required returns remained the same; and the stock price is expected to increase by $1 five years from now, does the current stock price also increase by $1? Why or why not?

I only need d) to be solved, thanks

(a) Derive the answer to price of the stock in 5 years (i.e. Find: Ps.) The question does not specify expected dividends or the required rate of return for beyond five years. Assume that following the fifth year (i.e. in the 6th year) that dividends grow at a constant rate forever and that the required rate of return remains at 10%

b) Find the growth rate of dividends that is consistent with your answer in part (a) to Ps. (Hint: use the Gordon growth model.) Now suppose instead that Ps-101.

c) What is the price of the stock today? Finally, suppose that dividends stay at S1 forever.

d）Unlike question b) above, consider a “two-stage Gordon growth model” where the growth rate of dividends is greater than required rate of return over the first five years. As before, suppose D1 =1 and ke =.1. However, now dividends grow from year 1 until year 5 at 20%, and after year 5 they stop growing. What is the price of the stock today?

Required information

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The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations.

Required:

1. Record transactions for each date. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts.

3. Calculate net accounts receivable at the end of 2021 and 2022.

Suppose that, prior to the passage of the Truth in Lending Simplification Act and Regulation Z, the demand for consumer loans was given by Q^d_pre-TILSA = 12 -100P (in billions of dollars) and the supply of consumer loans by credit unions and other lending institutions was Q^S_pre-TILSA = 5 + 150P (in billions of dollars). The TILSA now requires lenders to provide consumers with complete information about the rights and responsibilities of entering into a lending relationship with the institution, and as a result, the demand for loans increased to Q^d_post-TILSA = 18 -100P (in billions of dollars). However, the TILSA also imposed “compliance costs” on lending institutions, and this reduced the supply of consumer loans to Q^S_post-TILSA = 3 + 150P (in billions of dollars).

Based on this information, compare the equilibrium price and quantity of consumer loans before and after the Truth in Lending Simplification Act.(Note: Q is measured in billions of dollars and P is the interest rate).

Instruction: Enter your responses for the equilibrium price in percentage terms, and round all responses to one decimal place.

Equilibrium price (interest rate) before TILSA: ____ percent

Equilibrium quantity (in billions of dollars) before TILSA: $ ___ billion

Equilibrium price (interest rate) after TILSA: _____percent

Equilibrium quantity (in billions of dollars) after TILSA: $ _____billion

Required information

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Pearl E. White Orthodontist specializes in correcting misaligned teeth. During 2021, Pearl provides services on account of $581,000. Of this amount, $71,000 remains receivable at the end of the year. An aging schedule as of December 31, 2021, is provided below.
  

Required:

1. Calculate the allowance for uncollectible accounts.

2. Record the December 31, 2021, adjusting entry, assuming the balance of Allowance for Uncollectible Accounts before adjustment is $4,100 (credit). (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

3. On July 19, 2022, a customer’s account balance of $7,100 is written off as uncollectible. Record the write-off. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

4. On September 30, 2022, the customer whose account was written off in part 3 unexpectedly pays the full amount. Record the cash collection. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

TDABC is an activity-based costing that is also based on the function of time. In TDABC, we allocate the activity capacity based on how much time used for each activity.

There are two types of TDABC:

a. bottom-up TDABC (in which employees estimate the time associated with performing the activity once) --> leads to underestimation of time used

b. top-down TDABC (in which employees estimate the total time associated with the total practical capacity of the activity) --> leads to overestimation of time used

The question is why the underestimation/overestimation in TDABC occurs?

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows:

During November, the following activity was recorded related to the production of Fludex:

1. Materials purchased, 10,500 ounces at a cost of $216,825.

2. There was no beginning inventory of materials; however, at the end of the month, 2,600 ounces of material remained in ending inventory.

3. The company employs 20 lab technicians to work on the production of Fludex. During November, they each worked an average of 180 hours at an average pay rate of $14.00 per hour.

4. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $7,000.

5. During November, the company produced 3,700 units of Fludex.

Required:

1. For direct materials:

a. Compute the price and quantity variances.

b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract?

2. For direct labor:

a. Compute the rate and efficiency variances.

b. In the past, the 20 technicians employed in the production of Fludex consisted of 8 senior technicians and 12 assistants. During November, the company experimented with fewer senior technicians and more assistants in order to reduce labor costs. Would you recommend that the new labor mix be continued?

3. Compute the variable overhead rate and efficiency variances.

4. You have a fourth project that will cost 1700 to invest in one year from now, will generate a cash inflow of 150 starting in year three and continuing forever. If the discount rate is 8%, what is the NPV and should you accept the project based on the NPV?

5. Finally, you have a fifth project that will cost 1500 to invest in today, will generate a cash inflow of 165 in year one, which will grow at a constant rate of 2% for 29 additional years (for a total of 30 cash inflows), and will have a shutdown cost of 1000 at the end of year 30. If the project’s discount rate is 10%, what is the NPV and should you accept the project based on the NPV?

please show the formula for question 5

Nation’s Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firm’s controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm’s equipment maintenance costs must be determined. The accounting staff has suggested the use of an equation, in the form of Y = a + bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows:

Using the high-low method of cost estimation, estimate the behavior of the maintenance costs incurred by Nation’s Capital Fitness, Inc. Express the cost behavior pattern in equation form. (Round coefficient of X to 2 decimal places and other answer to the nearest whole dollar amount.)

Monthly Maintenance Cost =

Variable Maintenance Cost per hour =

Compute the predicted maintenance cost at 620 hours of activity.

Maintenance Cost =

1. Compute the variable cost per hour and the fixed cost per hour at 630 hours of activity. (Round your answers to 2 decimal places.)

Variable Cost per hour =

Fixed Cost per hour =

1. Why is the fixed cost per hour possibly misleading?

multiple choice

• Because it will change as the number of hours changes.

• Because it will not change as the number of hours changes.

Suppose a bank pays back the FED a discount loan worth $600,000. Use T-accounts to show the effect of the transactions on the bank and Fed’s balance sheet

In the current year, Azure Company has $350,000 of taxable income income before deducting any compensation or other payment to its sole owner, Sasha. Azure also has interest on municipal bonds of $25,000 not included above. Sasha has significant income from other sources and is in the 37% marginal tax bracket and is otherwise in the 20% long-term gain tax bracket. Based on this information, determine the income tax consequences to Azure Company and to Sasha during the year for each of the following independent situations. (Ignore the deduction for qualified business income and the 3.8% Medicare surtax on net investment income.)

1. Azure is a C corporation and pays no dividends or salary to Sasha. Azure and Sasha  .

2. Azure is a C corporation and distributes $75,000 of dividends to Sasha. Azure and Sasha  .

3. Azure is a C corporation and pays $75,000 of salary to Sasha. Azure and Sasha  .

4. Azure is a sole proprietorship, and Sasha withdraws $0. Azure  and Sasha  .

5. Azure is a sole proprietorship, and Sasha withdraws $75,000. Azure and Sasha  .

The following information applies to the questions displayed below.]

Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March.  

For specific identification, the March 9 sale consisted of 40 units from beginning inventory and 430 units from the March 5 purchase; the March 29 sale consisted of 90 units from the March 18 purchase and 170 units from the March 25 purchase.

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d)specific identification. (Round your average cost per unit to 2 decimal places.)

Problem 24-3A Departmental income statements; forecasts LO P3

Williams Company began operations in January 2017 with two operating (selling) departments and one service (office) department. Its departmental income statements follow.

Williams plans to open a third department in January 2018 that will sell paintings. Management predicts that the new department will generate $56,000 in sales with a 65% gross profit margin and will require the following direct expenses: sales salaries, $8,500; advertising, $1,100; store supplies, $1,000; and equipment depreciation, $900. It will fit the new department into the current rented space by taking some square footage from the other two departments. When opened, the new painting department will fill one-fifth of the space presently used by the clock department and one-fourth used by the mirror department. Management does not predict any increase in utilities costs, which are allocated to the departments in proportion to occupied space (or rent expense). The company allocates office department expenses to the operating departments in proportion to their sales. It expects the painting department to increase total office department expenses by $7,500. Since the painting department will bring new customers into the store, management expects sales in both the clock and mirror departments to increase by 11%. No changes for those departments’ gross profit percents or their direct expenses are expected except for store supplies used, which will increase in proportion to sales.

Required:
Prepare departmental income statements that show the company’s predicted results of operations for calendar-year 2018 for the three operating (selling) departments and their combined totals. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.

Bug-Off Exterminators provides pest control services and sells extermination products manufactured by other companies. Following is the company's unadjusted trial balance as of December 31, 2017.

The following information in a through h applies to the company at the end of the current year.

a. The bank reconciliation as of December 31, 2017, includes the following facts.

Reported on the bank statement is a canceled check that the company failed to record. (Information from the bank reconciliation allows you to determine the amount of this check, which is a payment on an account payable.)

b. An examination of customers’ accounts shows that accounts totaling $679 should be written off as uncollectible. Using an aging of receivables, the company determines that the ending balance of the Allowance for Doubtful Accounts should be $700.

c. A truck is purchased and placed in service on January 1, 2017. Its cost is being depreciated with the straight-line method using the following facts and estimates.

d. Two items of equipment (a sprayer and an injector) were purchased and put into service in early January 2015. They are being depreciated with the straight-line method using these facts and estimates.

e. On August 1, 2017, the company is paid $3,840 cash in advance to provide monthly service for an apartment complex for one year. The company began providing the services in August. When the cash was received, the full amount was credited to the Extermination Services Revenue account.

f. The company offers a warranty for the services it sells. The expected cost of providing warranty service is 2.5% of the extermination services revenue of $57,760 for 2017. No warranty expense has been recorded for 2017. All costs of servicing warranties in 2017 were properly debited to the Estimated Warranty Liability account.

g. The $15,000 long-term note is an 8%, five-year, interest-bearing note with interest payable annually on December 31. The note was signed with First National Bank on December 31, 2017.

h. The ending inventory of merchandise is counted and determined to have a cost of $11,700. Bug-Off uses a perpetual inventory system.

Required:
1. Determine amounts for the following items:  

1. Correct (reconciled) ending balance of Cash, and the omitted check amount.
2. Adjustment needed to obtain the correct ending balance of the Allowance for Doubtful Accounts.
3. Depreciation expense for the truck used during year 2017.
4. Depreciation expense for the two items of equipment used during year 2017.
5. The adjusted 2017 ending balances of the Extermination Services Revenue and Unearned Services Revenue accounts.
6. The adjusted 2017 ending balances of the accounts for Warranty Expense and Estimated Warranty Liability.
7. The adjusted 2017 ending balances of the accounts for Interest Expense and Interest Payable.

2. Use the results of part 1 to complete the six-column table by first entering the appropriate adjustments for items a through g and then completing the adjusted trial balance columns. (Hint: Item b requires two adjustments.)
3. Prepare journal entries to record the adjustments entered on the six-column table. Assume Bug-Off’s adjusted balance for Merchandise Inventory matches the year-end physical count.
4a. Prepare a single-step income statement for year 2017.
4b. Prepare a statement of owner’s equity (cash withdrawals during 2017 were $10,000) for year 2017 and there were no investments by the owner in the current year.
4c. Prepare a classified balance sheet as at 2017.

For the fiscal year ended December 31, 2019, Nicholas Corporation reported net income of $600,000 and had 900,000 common shares outstanding from the beginning to the end of the year. On May 1, 2019, Nicholas issued 5% convertible bonds. Each $1,000 bond is convertible into 120 common shares. The total proceeds were $1,000,000 at par and were recognized in the liability and equity components using the residual value method, measuring the liability component first, at the present value of the bonds, all discounted at 8%, (the interest rate that applies to similar straight bonds). At the time of issuance, the present value of the bond was $922,685. Calculate Nicholas Corporation’s basic and diluted Earnings per share, assuming the corporation experiences a 30% tax rate. Round your answer to two decimal places.