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beks73 [17]
4 years ago
6

Nu-Tek is expanding rapidly. As a result, the company expects to pay annual dividends of $.62, .80, and $1.05 per share over the

next three years, respectively. After that, the dividend is projected to increase by 4 percent annually. What is the current value of this stock if the required return is 16 percent? 1. $7.63 2. $9.67 3. $10.46 4. $6.58 5. $8.49
Business
1 answer:
MrRa [10]4 years ago
8 0

Answer:

1) $7.63

Explanation:

we must can determine the price of the stock by calculating the present value of the cash flows (dividends):

present value = $0.62/1.16 + $0.80/1.16² + $1.05/1.16³ + [($1.05 x 1.04)/ (16% - 4%)] = $0.53 + $0.59 + $0.67 + $9.10/1.16³ = $0.53 + $0.59 + $0.67 + $5.83 = $7.63

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How might you balance personal values with the desire to make a profit?
Natali [406]

Answer:

Every investor who ventures into the world of stock investments and finance does so with the clear objective of obtaining an economic gain: it is his clear purpose, and there is no other reason to take the risk than to obtain a benefit greater than the risk assumed. .

Now, each investor is a completely different individual from the others, and in that tenor, each of them has personal values that may be completely different from each other. Thus, each investor must balance her economic interests with her personal values: for example, a conservative and religious investor must analyze in her private heart if she wishes to invest in a company that finances research on abortion.

In this context, in my case my personal convictions do not influence my work, that is, investing is part of my work activity and therefore, my opinions are put aside when considering the investment that can provide the most profits.

4 0
3 years ago
A client is trying to decide between a par value corporate bond carrying a coupon rate of 6.25% per year and a par value municip
lana66690 [7]

Answer:

Municipal bond

Explanation:

We can clearly find out which bond to select by finding their equivalent taxable yield.

DATA

Coupon rate (corporate bond) = 6.25%

Coupon rate (municipal bond) = 4.75%

Marginal income tax = 28%

Equivalent taxable yield of municipal bond = coupon / (1-tax rate)

Equivalent taxable yield of municipal bond = 4.75% / (1-0.28)

Equivalent taxable yield of municipal bond =  6.6%

Hence municipal bond must be selected having a higher equivalent taxable yield as compared to corporate bond.

4 0
3 years ago
A corrective tax Select one: a. allocates pollution to those factories that face the highest cost of reducing it. b. works well
strojnjashka [21]

Answer:

d. is a form of regulation.

Explanation:

A corrective tax is a market-based policy option used by the government to address negative externalities. Thus, the tax on these negative externalities is increased and thus could cause decreased production

4 0
3 years ago
Read 2 more answers
What are THREE purposes of monetary policy? A to eliminate competition B. to promote price stability c. to eliminate unemploymen
Oksanka [162]

Answer:

c. to eliminate unemployment,B. to promote price stability and F. to control federal spending

Explanation:

8 0
3 years ago
Losses on the cash sales of property, plant, and equipment:
Andreyy89

Answer:

c. Are the excess of the book value over the cash proceeds.

Explanation:

The property, plant, and equipment are classified as the fixed assets which are reported in the asset side of the balance sheet

If the cash sales of property, plant, and equipment are sold more than the book value then it would be the gain.

But if the cash sales of property, plant, and equipment is sold less than the book value than it would be the loss to the company.

4 0
3 years ago
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