$ 30, 000, What Will Be The Impact On Equilibrium Price And Quantity?

10. If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

Q.1) Compute the following quantities for the current production process as well as for Mike’s and Ike’s plans, assuming the plans are implemented as described in the case.

21. Universal Forests current stock price is $154.00 and it is likely to pay a $5.23 dividend next year. Since analysts estimate Universal Forest will have a 13.0% growth rate what is the required return?

of dividends, and a required return of 10 per cent per annum. The value of each

c) The present value of $500 to be received in one year when the opportunity cost rate is 8 percent (discounting):

Suppose that P.V. Ltd. paid a dividend of $10 at the end of year 1 (any portion of

b. What would Mrs. Beach have to deposit if she were to use common stock and earned an average rate of return of 11%.

What happens to the equilibrium price and quantity after these changes are put into effect? Do they go up, down or stay the same?P:_____down_____________Q:_____down__________________

Your required rate of return is 9 percent. Ignoring taxes, what is the value of one share of this stock today?

Supplier A: EOQ = Square root of (2 x 1500 x $1,000) = S.R. of 3,000,000 = 209

Some applications of dividend discount modeling can be more complex. One method divides the future growth in dividends into three periods, all of which have different growth rates. This is useful when a company’s profits are expected to grow rapidly and then gradually decline to an industry average. The complexities of this model are outside of the scope of this report, and the model can easily be run using tools found online. The assumptions of this calculation as follows. Walmart is no longer in a growth phase, so this calculation assumes that it is at the transitional phase. Because of this, 2007 data is used to initialize the calculation (EPS, dividend, etc.,) and the ‘growth’ period was 3 years. Initial growth of EPS still assumed to be 10.4%. 14 transitional years, as required by the model (total of 17 years for growth and transition is required). All of these assumptions result in a 3 stage DDM

What are the expected dividend yield and capital gains yield during the fourth year (from Year 3 to Year 4)?

Each week there are 300 pounds of material 1; 400 pounds of material 2; and 200 hours of labor. The output of product A should not be more than one-half of the total number of units produced. Moreover, there is a standing order of 10 units of product C each week.

c) Estimated 600 additional direct workers and 200-240 additional indirect workers would be required for factory production.

The standard method of calculating a stock price using the perpetual dividend growth model is done by assessing a company’s dividend one year into the future adding the future expected growth rate. The formula is written as: P0 = D1/(Ke − g), where Ke is the investor required return, D1 is next year’s dividend and g is the