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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%

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During 2019, half of the treasury stock was resold for $180,000; net income was $510,000; cash dividends declared were $1,320,00
Sliva [168]

Answer:

$5,790,000 using opening balance assumption which was not provided in the question

Explanation:        

Shareholders Equity 2019= Opening Shareholders Equity + Resold Treasury Stock + Net income - Cash Dividends Paid

Here

Resold Treasury Stock is $180,000

Net income $510,000

Cash Dividends Paid $1,320,000

Opening Shareholders Equity is missing so we assume the following remainder part as I didn't find the remainder part anywhere:

As of Dec. 31, 2018, Warner Corporation reported the following: Dividends payable- 20,000; treasury stock- 600,000; paid-in capital-share repurchase- 20,000; other paid-in capital accounts- 4,000,000; retained earnings- 3,000,000.

So

Opening Shareholder Equity = Opening paid-in capital accounts + Retained earnings - Treasury Stock + Paid in Capital share repurchases

Opening Shareholder Equity = $4,000,000 + $3,000,000 - $600,000 + 20,000 = $6,420,000

By putting values, we have:

Shareholders Equity = $6,420,000 + $180,000 + $510,000 - $1,320,000

Shareholders Equity = $5790,000

4 0
3 years ago
Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will make 16 d
daser333 [38]

Answer:

For Jerry, the opportunity cost of building a fence is not making 2 dishes.

Explanation:

The opportunity cost refers to the benefit you lose when you choose one option over another one. In this case, the opportunity cost for Jerry when he decides to build fences is that he won't be able to make dishes. So, as he can build 7 fences or make 14 dishes in a day, the opportunity cost of building a fence is that he won't be able to make 2 dishes.

6 0
2 years ago
What are chemical contaminants
vaieri [72.5K]

Answer:

Chemical contaminants are chemicals toxic to plants and animals in waterways. The phrase 'chemical contamination' is used to indicate situations where chemicals are either present where they shouldn't be, or are at higher concentrations than they would naturally have occurred.

Explanation:

8 0
2 years ago
Coppertone uses a _____ advertising schedule, where it advertises heavily in the months leading up to and during the summer, wit
algol [13]
The answer is flighting advertising schedule. It is a publicizing progression or timing design in which promoting messages are booked to keep running amid interims of time that are isolated by periods in which no publicizing messages show up for the promoted thing.
8 0
3 years ago
There will be a lower equilibrium price and quantity if
denis23 [38]

Answer: demand decreases and supply stays the same

Explanation:

The equilibrium price refers to the price whereby the quantity of goods that's demanded and the quantity of goods that's supplied is equal.

On the other hand, the equilibrium quantity is gotten when the quantity of goods demanded and supplied are equal. This is gotten when the demand curve and the supply curve intersects.

It should be noted that there will be a lower equilibrium price and quantity if

In a situation whereby the demand increases and the supply remains the same, the equilibrium quantity and the equilibrium price will increase and vice versa.

8 0
3 years ago
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