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
Shondee Corporation uses the lower of cost or market and FIFO inventory methods. At the end of 2018, the FIFO cost of the ending
Assoli18 [71]

Answer:

reported as income for all three years   is $7,000

Explanation:

given data

cost of the ending inventory = $181,000

market value  inventory =  $160,000

to find out

Shondee Corporation must add income

solution

we get here Income per year that is

Income per year = (Value under FIFO Method - Value Under Cost Method ) ÷ Number of year      ..............................1

put here value we get

Income per year = \frac{181000 - 160000}{3}

Income per year =   \frac{21000}{3}

Income per year =  $7000

so reported as income for all three years   is $7,000

8 0
3 years ago
Using the picture of the supply and demand curves below, identify the point which
Doss [256]

Answer:

c is the correct represent the equilibrium price if I am not wrong

Explanation:

<em>sry </em><em>if </em><em>I </em><em>a</em><em>m</em><em> </em><em>wrong</em>

8 0
2 years ago
Lincoln Park Co. has a bond outstanding with a coupon rate of 5.73 percent and semiannual payments. The yield to maturity is 6.7
Natalija [7]

Answer:

Bond Price​= $1,774.05

Explanation:

Giving the following information:

Coupon rate= 0.0573/2= 0.02865

YTM= 0.067/2= 0.0335

The bond matures in 23 years.

Par value= $2,000

<u>To calculate the bond price, we need to use the following formula:</u>

Bond Price​= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price​= 57.3*{[(1 - (1.0335^-46)] / 0.0335} + [2,000/1.0335^46]

Bond Price​= 1,334.76 + 439.29

Bond Price​= $1,774.05

5 0
2 years ago
Explain the following: "a broadened view of social responsibility of business calls for more attention to social concerns."
mina [271]
That is right glad u got help!
3 0
3 years ago
Paper Corporation owns 75 percent of Scissor Company's stock. On July 1, 20X8, Paper sold a building to Scissor for $33,000. Pap
Kazeer [188]

The depreciation expense will be credited for $750 in the consolidating entries while preparing the 20X8 consolidated income statement,

<h3>What is the depreciation expense?</h3>

This refers to the cost of an asset that has been depreciated for a single period such as in that year.

Depreciation expense = Cost  - Salvage value / Useful life

Depreciation expense = $36,000 - $33,000 / (2 years (semi-annual charges)

Depreciation expense = $3,000 / 4

Depreciation expense = $750

Therefore, the depreciation expense will be credited for $750 in the consolidating entries while preparing the 20X8 consolidated income statement,

Read more about depreciation expense

<em>brainly.com/question/25785586</em>

#SPJ1

3 0
2 years ago
Other questions:
  • As they apply to business conduct and business decisions, ethical principles A. A) deal chiefly with a company's standards about
    14·1 answer
  • The share of ________ by the top firms is known as the concentration ratio.
    13·1 answer
  • In the résumé above, what would cause appearance of the "00000000000"?
    14·2 answers
  • Which of the following are considered career in government and public administration? Select all that apply.
    13·2 answers
  • What is the name of the diagram that shows physical needs must be met befroe all other needs and wants?
    8·1 answer
  • Max Weber argued that the ascetic principles embedded in ________ do not encourage entrepreneurial activity in pursuit of wealth
    10·1 answer
  • A group of ten UIC professors each contributed an equal amount to the purchase of a State of Illinois Lottery ticket. Two of the
    13·1 answer
  • Christine has obtained a job pitching a product at a local state fair. Her job is to demonstrate cookware, highlighting its feat
    8·1 answer
  • About COMM101
    11·1 answer
  • Give the human resource and it law​
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!