<span>Assume firm needs $10,000. Face amount of loan = $10,000/(1 â’ 0.11 â’ 0.20) = $14,492.75. Discount interest = 0.11($14,492.75) =$1,594.20. Compensating balance = 0.20($14,492.75) = $2,898.55.
With a financial calculator, enter N = 1, PV = 10,000, PMT= 0, FV = â’11,594.20, and solve for I/YR = 15.94%.</span>
The stock's current price is $18.29.
<h3>What is Stock Valuation?</h3>
The price of the stock is determined by demand and supply. The price of the stock is also linked with the fundamentals of the company. To determine its intrinsic value the future cash difference is discounted.
Solution-
Stock's current price = <u> Dividend </u>
Required rate of return -Growth rate
Stock's current price = <u> </u><u>$0.75 </u>
10.5 % - 6.4%
Stock's current price = <u> </u><u>$0.75 </u>
4.1%
Stock's current price = <u> $0.75 </u>
0.041
Stock's current price = $18.29
Your question is incomplete, but most probably your full question was:
A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is Rs = 10.5%, and the expected constant growth rate is g = 6.4%.
Required: What is the stock's current price?
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Answer:
The correct answer is : 3.8 times
Explanation:
This inventory system is easy to calculate when you divide the cost of goods that were sold by average inventory. The turnover was 5.1 times in 2016 and in the following year, it was 8.9. This showed an increasing tendency of 3.8 times more. This approach has the purpose of sourcing, storing, and selling inventory—both raw materials and finished goods.
