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
Evgen [1.6K]
3 years ago
14

Precision Engineering recently announced that its next annual dividend will be $1.20 per share with later dividends increasing b

y 2.5 percent annually. What is the current value of this stock to you if you require a 12 percent rate of return?
Business
1 answer:
Alexus [3.1K]3 years ago
3 0

Answer:

The current value of the  stock  is $12.63

Explanation:

price of a share

P_{t} = \frac{D_{t} }{R - g}  ... 1  

                                     where, P_{t} = price of a stock at t years

                                      D_{t} = dividend at year t

                                       R= rate of return from market

                                       g = growth rate of dividend

substituting into equation 1

P_{t} = $1.2 ÷ 12% - 2.5%

    = $1.2 ÷ 0.095

    = $12.6316

     = $12.63

You might be interested in
A. Finance, or financial management, requires the knowledge and precise use of the language of the field.
Sergio [31]

Answer:

1. Amortization Schedule.

2. Amortized loan.

3. Annual Percentage rate.

4. Discounting.

5. Future Value.

6. Opportunity cost of funds.

7. Time value of money.

8. Annuity due.

9. Perpetuity.

10. Ordinary annuity.

11. PMT/r.

Explanation:

Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP).

Some of the financial terminologies used in financial accounting are;

1. <u>Amortization Schedule</u>: A schedule or table that reports the amount of principal and the amount of interest that make up each payment made to repay a loan by the end of its regular term.

2. <u>Amortized loan</u>: A loan in which the payments include interest as well as loan principal.

3. <u>Annual Percentage rate</u>: A value that represents the interest paid by borrowers or earned by lenders, expressed as a percentage of the amount borrowed or invested over a 12-month period.

4. <u>Discounting</u>: A process that involves calculating the current value of a future cash flow or series of cash flows based on a certain interest rate.

5. <u>Future Value</u>: The name given to the amount to which a cash flow, or a series of cash flows, will grow over a given period of time when compounded at a given rate of interest.

6. <u>Opportunity cost of funds</u>: A 6% return that you could have earned if you had made a particular investment.

7. <u>Time value of money</u>: A concept that maintains that the owner of a cash flow will value it differently, depending on when it occurs.

8. <u>Annuity due</u>: A series of equal cash flows that occur at the beginning of each of the equally spaced intervals (such as daily, monthly, quarterly, and so on).

9. <u>Perpetuity</u>: A cash flow stream that is generated by a share of preferred stock that is expected to pay dividends every quarter indefinitely.

10. <u>Ordinary annuity</u>: A series of equal cash flows that occur at the end of each of the equally spaced intervals (such as daily, monthly, quarterly, and so on).

11. Time value of money calculations can be solved using a mathematical equation, a financial calculator, or a spreadsheet. The equation which can be used to solve for the present value of a perpetuity is given below;

Present value of a perpetuity (PV) = PMT/r

Where;

  • PMT represents the payment amount.
  • r represents the annual interest rate.
3 0
3 years ago
3M Co. reports beginning raw materials inventory of $930 million and ending raw materials inventory of $880 million. 3M purchase
Naddik [55]

Answer:

raw material inventory turnover = 4.42

number of days sale in raw materials inventory = 21.97

Explanation:

given data

beginning inventory = $930 million

ending inventory = $880 million

purchased raw materials  = $3,956 million

used raw materials  = $4,006 million

solution

we get here first raw material inventory for turnover that is

raw material inventory turnover = \frac{raw\ material\ used}{average\ raw\ material}    ..............1

here average raw material inventory = \frac{930+880}{2}

average raw material inventory = $905 million

so from equation 1

raw material inventory turnover = \frac{4006}{905}  

raw material inventory turnover = 4.42

and

now number of days' sales in raw materials inventory will be as

number of days sale in raw materials inventory = \frac{ending\ raw\ material\ inventory}{raw\ material\ used}  × 365   .............2

put here value

number of days sale in raw materials inventory = \frac{880}{4006}  × 365

number of days sale in raw materials inventory = 21.97

8 0
3 years ago
Foreign firms should seek alliances with well-qualified local companies in countries characterized by inadequate legal and polit
balu736 [363]
<span>Foreign firms should seek this sorts of alliances, because making them is a good way to obtain knowledge of local markets; contrast this to a foreign firm attempting to start up a branch on their own, perhaps in the form of a greenfield venture. They would potentially have to figure out local market conditions from scratch, whereas a local company would potentially have years of successful experience and knowledge already at their fingertips.</span>
8 0
3 years ago
Exercise 8-7 At December 31, 2018, Concord Corporation Company had a credit balance of $18,800 in Allowance for Doubtful Account
Marina86 [1]

Answer:

Dr Allowance $13,500

Cr Accounts Recivable $13,500

Dr Accounts Recivable $3,500

Cr Allow ance $3,500

Dr Cash $3,500

Cr Accounts Rec $3,500

Dr Bad Debts Expense $21,900

Cr Allowance $21,900

Explanation:

Preparation of the journal entries to record the 2019 transactions of Concord Corporation Company

Dr Allowance $13,500

Cr Accounts Recivable $13,500

(To record amount written off)

Dr Accounts Recivable $3,500

Cr Allow ance $3,500

(To reverse write-off)

Dr Cash $3,500

Cr Accounts Rec $3,500

(To record collection of writeoff)

Dr Bad Debts Expense $21,900

Cr Allowance $21,900

[$30,700-($18,800-$13,500+$3,500)]

8 0
3 years ago
The structure which takes one of two paths based on a decision is called a(n) ____ structure.
Rus_ich [418]
An if then else structure.
Hope it helps!
5 0
3 years ago
Other questions:
  • Swifty Corporation reported the following year-end information: Beginning work in process inventory $1080000 Beginning raw mater
    5·1 answer
  • The break-even point is where the ____ line crosses the ____ line in a graphic break-even analysis. Select one:
    15·1 answer
  • Prior to its takeover by china in 1997, many hong kong chinese migrated to vancouver, canada. this illustrates the process of th
    15·1 answer
  • Aaron is a freshman in college who has not yet decided on his major. He is thinking about majoring in operations management and
    6·1 answer
  • You are the manager of a medium-sized farm with 100 acres of workable land. You can farm the land yourself, rent the land to ano
    13·1 answer
  • YO GUYS mator12 IS A BIG BABY
    14·1 answer
  • On January 2, 2015, Vaughn Corporation issued $1,650,000 of 10% bonds at 96 due December 31, 2024. Interest on the bonds is paya
    7·1 answer
  • Why is it important to know to know how much is in your checking account ?
    15·1 answer
  • What is the expected constant-growth rate of dividends for a stock currently priced at $50, that just paid a dividend of $4, and
    7·1 answer
  • The __________ is the set of guidelines issued by the EEOC and other agencies to identify how an organization should establish a
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!