1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Nuetrik [128]
3 years ago
10

$26 per share is the current price for Foster Farms' stock. The dividend is projected to increase at a constant rate of 7.00% pe

r year. The required rate of return on the stock, rs, is 12.00%. What is the stock's expected price 5 years from today?
Business
1 answer:
ladessa [460]3 years ago
8 0

Answer:

33.94%

Explanation:

The computation of stock's expected price 5 years is shown below:-

Stock price = $26

Required return = 12%

Growth rate = 7%

Current dividend per share = Stock price × (Required return - Growth rate) ÷ (1 + Growth rate)

= $26 × (12% - 7%) ÷ (1 + 7%)

= $26 × 5% ÷ 1.07

= $1.21

Stock price in 5 years = Expected dividend ÷ (required return - Growth rate)

Expected dividend = $1.21 × (1 + 7%)^5

= $1.21 × 1.402551731

= $1.697

Stock price in 5 years = $1.697 ÷ (12% - 7%)

= $1.697 ÷ 5%

= 33.94%

You might be interested in
What must profit-seeking entrepreneurs do in order to be successful?
Nostrana [21]
To put it simply, they have to develop a product that make people want to pay to acquire it.

Sellable product usually either :
- able to make people happy ( such as movies, music, Delicious food, etc) or
- Able to make people's life become easier ( such as Gadgets, consultation service, etc)

8 0
4 years ago
Fernstrom Corporation has two divisions: East and West. Data from the most recent month appear below: East West Sales $ 330,000
GenaCL600 [577]

Answer:

The company’s overall net operating income  would be $52,140

Explanation:

If the all divisions of the company are operates at break even level the overall net operating income of the company would be zero . because at break even level the sales value is equals to total variable cost plus total fixed cost if the company incurring any addition fixed cost then the over all net operating income will show loss of additional fixed incurred.  The answer for the given question is the overall net operating income of the company would be ($52,140).

3 0
3 years ago
The nation with the largest percentage of publically held land is
RideAnS [48]
The nation with the largest percentage of publicly held land is United state of America. These lands are usually set aside for different purposes such as parks, refuge camps, forests, historical places, etc.
6 0
3 years ago
Assume a drought in the Great Plains reduces the supply of wheat. Noting that wheat is a basic ingredient in the production of b
Gnom [1K]

Answer:

price of wheat to increase, the supply of bread to decrease, and the demand for potatoes to increase.

Explanation:

A drought will reduce the supply of wheat thereby causing the supply curve to shift upwards (to the left) leading to an increase in the price of wheat. Since wheat is a basic ingredient in producing bread, an increase in the price of wheat will increase the cost of producing bread. An increase in cost of producing bread will reduce the supply of bread, shifting the supply curve to the right.

Potatoes and bread are close substitutes and therefore, have a competitive demand. An increase in the price of bread will increase the demand for potatoes because rational consumers will opt for a cheaper alternative considering their money income.

5 0
4 years ago
Solartech Corporation, a U.S. exporter, sold a solar heating station to a Japanese customer at a price of 143.5 million yen, whe
Ulleksa [173]

Answer:

$929,404.15 (approx)

Explanation:

The dollar amount actually earned by Solartech after exchanging yen for U.S. dollars :-

= Price ÷ One dollar bought

= 143,500,000  ÷ $154.40 yen

= 143,500,000 ÷ $154.40  yen

= $929,404.15 (approx)

Therefore for computing the dollar amount actually earned by Solartech after exchanging yen for U.S. dollars, we simply divide price by one dollar bought.

3 0
3 years ago
Other questions:
  • Employers prefer to review a _____ resume when trying to find which candidate has the specific skills necessary for a designated
    5·1 answer
  • Darian has decided to attend an out-of-state public four-year university. His expected expenses are shown in the table. Category
    8·2 answers
  • <img src="https://tex.z-dn.net/?f=%5Crm%7B%5Cpink%7B%5Cunderline%7B%5Cunderline%7B%5Cblue%7BANSWER%3A-%7D%7D%7D%7D%7D" id="TexFo
    7·2 answers
  • Which of the following refers to the acquisition of goods in one country and the selling of them to buyers in another country?
    15·1 answer
  • Last year, Twins Company reported $750,000 in sales (25,000 units) and a net operating income of $25,000. At the break-even poin
    11·1 answer
  • Which of the following is prepared first?
    5·1 answer
  • When you validate a customer, you are:​ . Ensuring that the customer will buy the product b. Ensuring that a solution currently
    10·1 answer
  • The three fundamental elements that motivate people to be fair are _____.
    11·1 answer
  • The most rigorous test of a firm's ability to pay its short-term obligations is its?
    9·1 answer
  • Extraction of petroleum from oil sands causes environmental degradation at the extraction site and its surroundings. how does th
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!