Question
George wants to know how many boxes of chocolate bars he needs to sell for $25.00 to break even. He estimates fixed operating costs of
George wants to know how many boxes of chocolate bars he needs to sell for $25.00 to break even. He estimates fixed operating costs of $12500 per year, and variable operating costs of $15 per box.
(a) How many boxes must he sell to break even on operating costs?
(b) George incorporates, issues 1000 shares of common stock, and declares dividends of $2 per share for the first year. His estimates his growth rate at 3%, required return 5%. How much is his company worth?
(c) The Board of Directors of Georges corporation declares a dividend to shareholders of record on Thursday April 30, 2015. When is the last day you can purchase stock in Georges corporation and still receive the dividend?
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