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
erica [24]
3 years ago
12

Hi-Tek is a young start-up company that is currently retaining all of its earnings. The company plans to pay a $2 per share divi

dend in Year 7 and increase that dividend by 2.2 percent per year thereafter. What is the current share price if the required return is 16 percent?
Business
1 answer:
Anika [276]3 years ago
5 0

Answer:

$5.95

Explanation:

Given that,

Dividend paid in Year 7 = $2 per share

Growth rate of dividend = 2.2%

Required return = 16 percent

Share price is the present value of all future dividends.

Present Value of future dividends at year 6:

= \frac{Dividend\ in\ year\ 7}{Required\ return - Growth\ rate}

= \frac{2}{0.160 - 0.022}

= \frac{2}{0.138}

= $14.49

Present value of dividends (Now):

= Present Value of future dividends at year 6 × (1 + Required return)^{-6}

= $14.49 × (1 + 0.16)^{-6}

= $5.95

Therefore, the current share price is $5.95 if the required return is 16 percent.

You might be interested in
Charlie Chairs Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materi
UNO [17]

Answer:

Units transferred out = 760

Explanation:

If we assume that all units are completed in the order of arrival i.e (FIFO), then the units transferred out is the sum of the opening inventory and the units started and completed in the period. The units started and completed in the period is referred to fully-worked.

Fully worked is computed as the units started in the period less the closing inventory .

Fully- worked = 800 - 240 = 560

The units transferred out = opening inventory + Fully-worked

                                          = 200 + 560 = 760

Units transferred out = 760

Note we assumed that the units of the inventory( started last period i.e January) would be worked on first in the month of February  before any other units. So, it is assumed completed by the end of February

6 0
3 years ago
What was the approximate time period of the sales era?
Pie
The sales era was 1920s-1940s
5 0
3 years ago
!. without asking, you help a coworker who is burdened by multiple and fast approaching deadlines.
PtichkaEL [24]
I believe it is C, hope this helps!!
8 0
3 years ago
The balance sheet of Messi Services included the following shareholders' equity section at December 31, 2018: ($ in millions) Co
Yuri [45]

Answer: The answer is c $1,080 $560

Explanation:

The journal entry will be

Dr: common stock $200 million

Dr: paid in capital $180 million

In the stockholders equity section , the treasury stock is seen as a separate line item in the stockholders equity. The treasury stock will be deducted from the total stockholders equity. The treasury stock is not a part of paid in capital nor part of the retained earning.

Therefore the balance in the paid in capital excess of par Retained Earnings is 1,080 $560

6 0
3 years ago
Read 2 more answers
William, who is a waiter, is injured when an unopened bottle of cola explodes in his hand while he is putting it into the restau
Anna11 [10]

Answer:

The answer is "Whenever a court requires him to use the res ipsa loquitur doctrine, he possibly would succeed".

Explanation:

Res ipsa loquitur is also an English common law doctrine which claims in an action for tort, throughout the absence of direct proof on whether any defendant acted, a jury may conclude neglect of the nature of an illness or incident. It is used in circumstances in which the complainant is not presented sufficient proof that the offender is not liable.

4 0
2 years ago
Other questions:
  • Tim is the ceo of doc.com, an information search internet company. a manager comes in saying that he's been trying to get the in
    5·1 answer
  • Adjectives are used to describe personality traits. True False
    12·1 answer
  • The school production of​ 'Our Town' was a big success. For opening​ night, 501 tickets were sold. Students paid ​$3.00 ​each, w
    14·1 answer
  • people who are into females only!!! what do you find the most attractive about a girl and what things do you want her to talk to
    7·2 answers
  • Sophie is highly concerned about what others think of her. She is extremely careful about freely displaying her feelings and opi
    12·1 answer
  • A stability strategy is a grand strategy that involves little or no significant organizational change. For example, Love Forever
    13·2 answers
  • While a Guaranteed No-lapse Rider relieves the policyowner of the responsibility of monitoring the policy's cash value what is r
    11·1 answer
  • A bond that pays interest annually yielded 7.25 percent last year. The inflation rate for the same period was 5.50 percent. What
    12·1 answer
  • Division A makes a part with the following characteristics: Production capacity in units 34,000 units Selling price to outside c
    10·1 answer
  • Swifty Company's accounting records show the following at the year ending on December 31, 2022: Purchase Discounts $ 11300 Freig
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!