260 Chapter 6 Investments
B. Distributing Profi ts of a Partnership
- An accounting fi rm has three partners: Pacioli, Mellis, and Dafforne. The three partners have agreed to distribute the fi rm’s
profi ts in an 18:14:16 split. This quarter, the fi rm made $127,309 and this entire profi t will be distributed among the partners.
a. How much will each receive?
b. If the profi ts were split equally among the partners, how much would each have received?- Cindy, Jim, and Shawn are partners in a catering business. They have agreed to distribute profi ts with a 6:5:4 split. Last
month, the business earned $3,645, which will be entirely distributed to the partners.
a. What is each partner’s share of the profi ts?
b. How much would each have been paid if the profi ts were distributed equally.C. Dividend Yields
- Metanational Globalnet Corp. has just declared a quarterly dividend of 84 cents per share. The current stock price is
$42.45 per share. Calculate the current dividend yield. - Salamanca Semiconductors pays a quarterly dividend of 57.5 cents per share. The current stock price is $108.45.
Calculate the current dividend yield. - Aeolus Wind Systems has just declared a quarterly dividend of $1.35 per share. Over the last 12 months, the company
has paid out a total of $5.25 per share in dividends. The company’s stock is currently selling for $157.03 per share.
a. Calculate the current dividend yield.
b. Calculate the trailing dividend yield.- Zovaxacquin Pharmaceuticals pays a quarterly dividend of 22 cents per share. Axerixia Corp. pays 59 cents per share
quarterly. The stock of Zovaxacquin sells for $17.35 per share, while Axerixia sells for $68.45. Which company has the
higher dividend yield? Justify your answer.
D. Compound Annual Growth Rates
In this section, growth rates should be calculated from the capital gain or capital loss on the investment only. Any dividends
that may or may not have been paid should be ignored.
- Three years ago, I bought stock in Salamanca Semiconductors for $25.09 per share. The stock is now worth $108.45
per share. There were no stock splits. Calculate the compound annual growth rate for my investment. - Alan invested $25,000 in his brother’s home improvement business 5 years ago. The business has done well, and his
brother has offered to buy out Alan’s share of the business for $52,000. If Alan takes this offer,
a. How much of a capital gain would he have earned?
b. What compound annual growth rate would his investment have earned?- Ten years ago Collette invested $15,409.18 in the stock of Metanational Globalnet Corp. Today, that stock is worth
$30,902.17. Find the compound annual growth rate for this investment.