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lora16 [44]
3 years ago
10

Lifecycle Motorcycle Company is expected to pay a dividend in year 1 of $2, a dividend in year 2 of $3, and a dividend in year 3

of $4. After year 3, dividends are expected to grow at the rate of 7% per year. An appropriate required return for the stock is 12%. Using the multistage DDM, the stock should be worth __________ today.
Business
1 answer:
Bezzdna [24]3 years ago
7 0

Answer:

$67.95

Explanation:

Dividends per year;

D1 =$2

D2 = $3

D3 = $4

D4 = D3(1+g)

g= growth rate = 7% or 0.07 as a decimal

D4 = 4*(1.07) = $4.28

Next, find PV of each dividend at 12% rate of return and sum them up;

Price= 2/ (1.12) + 3/(1.12^2) +4/ (1.12^3) + \frac{4.28/(0.12-0.07)}{1.12^{3} }

=1.7857 + 2.3916 + 2.8471 + 60.9284

= 67.9528

Therefore, the stock should be worth $67.95 today

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Answer:

they are dependent on situational probabilities

Explanation:

Arturo's decision about which torch to purchase is being made under conditions of ambiguity , because: they are dependent on other factors.

The decision making is not certainty because his decision on which torch to buy is dependent on probabilities neither is it uncertain because we have information on probabilities of what the outcome might be.

Hence the decision making is ambiguous because it is between certain and uncertain and its outcome is dependent on the probabilities of having a discount or not.

5 0
3 years ago
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A-Z Construction Company was organized on May 1 of the current year. On May 2, A-Z Construction prepaid $18,480 to the city for
Nina [5.8K]

Answer:

Explanation:

The journal entries are shown below:

Taxes expense A/c Dr $12,320

        To Prepaid Taxes                      $12,320

(Being prepaid taxes are adjusted)

Taxes expense A/c Dr $45,000

        To Property taxes payable                   $45,000

(Being property taxes are adjusted)

The prepaid taxes are computed below:

= Prepaid taxes × (number of months ÷ total number of months in a year)

= $18,480 × (8 months ÷ 12 months)

= $12,320

The eight months is calculated from May 1  to December 31

6 0
2 years ago
An excerpt of an introduction of a cover letter about a Marketing position.
kolezko [41]

Answer:

answer is b

Explanation:

its b

8 0
3 years ago
Peter, Paul, and Mary go to an all-you-can-eat buffet. The normal entrance fee is $20, but Peter gets in free because it is his
Firdavs [7]

Answer:

mary

Explanation:

A rational consumer would consume up to the point that marginal benefit equal marginal cost

Mary paid $20. this means that she places a value of $20 on the meal.

Paul paid $10. this means that he places a value of $10 on the meal

The value Mary places is 20, so she places a higher value and she would consume the most

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victus00 [196]

Upon completion, Davis tells Jones to see Smith for payment : Smith may be liable since he had noticed and did nothing.

Explanation:-

Yes because he had express notice by registered letter and did nothing.

The only evidence of execution, apart from registered databases, that is acknowledged by most jurisdictions.

A notification agreement is a compromise between the parties on how notifications should be issued and how their conditions should be very specific. A provision of a notification shall be an agreement between parties as to how notices on contractual issues can be received, and this provision should be very clear about its requirements.

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3 years ago
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