Answer:
$19.47
Explanation:
The computation of the price paid for share is shown below:
= Year second dividend ÷ (Required rate of return - growth rate)
where,
Next year dividend is
= $2.20 + $2.20 × 2.2%
= $2.20 + $0.0484
= $2.2484
In the year 2 , it is
= $2.2484 × 1.022
= $2.2978648
And, the required rate of return is 14%
Plus the growth rate is 2.2%
So, the price paid for the share is
= ( $2.2978648) ÷ (14% - 2.2%)
= $19.47
A dollar in the present day is worth less than that of the dollar in the future, because of returns generated over reinvestment.
<h3>What is reinvestment?</h3>
A process of investing something, which is invested more than once after generating returns over it, is known as a reinvestment. A currency is the most widely reinvested class of asset, and generally its value appreciates.
Hence, the significance of reinvestment is given above.
Learn more about reinvestment here:
brainly.com/question/17206010
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Answer: The problem in outsourcing from low-cost country:
It is seeking goods and services beyond the border of a region. It is a process where organizations look for the most cost-effective place globally to manufacture their goods. Most organizations choose a global sourcing strategy as the cost is using lower abroad.
Explanation:
Outsourcing from low-cost countries a move by the company to cut costs as they have a huge presence of labor. It will allow them to concentrate on their core activities. But, there are some problems outsourcing from low-cost countries. Some are :
1. Sometimes the outsourcing does not provide the expected cost savings.
There might be new conflict and problem arising from different sources
2. There might be legal barriers present between the two different nations involved in outsourcing.
