Ryder Cosmetics in P11-48A holds significant promise for carving a niche in its industry.
In P11-48A, the following information was taken from the records of Ryder Cosmetics, Inc., at December 31, 2014:

A group of Irish investors is considering purchasing the company€™s outstanding common stock. Ryder€™s stock is currently selling for $ 45 per share. A BetterLife Magazine story predicted the company€™s income is bound to grow. It appears that Ryder can earn at least its current level of income for the indefinite future. Based on this information, the investors think that an appropriate investment capitalization rate for estimating the value of Ryder€™s common stock is 10%. How much will this belief lead the investors to offer for Ryder Cosmetics? Will Ryder€™s existing stockholders be likely to accept this offer? Explain youranswers.

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.. 38,000 23,000 Prior-period adjustment-net of taxes Dividends on common stock $ 8,400 Interest expense Income tax expense (savings) Continuing operations40,300 Dividend revenuc13,000 Income from discontinued Treasury stock, common (3,000 shares at cot 15,000 71,900 Loss on salc of plant assets11,000 Sales revenuc603,000 4,600 Extraordinary loss.(8,570) General expenscs... Incomc from discontinued Retained carnings, beginning, operations.14,000 as originally reported. 201,000 Selling expenses " … 82,000 Preferred stock, 8%, $30 par, 3,000 shares issued 29,000 Cost of goods sold..294,000 Extraordinary los 26,000 shares authorizcd and issued. 360,000