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nadya68 [22]
3 years ago
12

Keidis Industries will pay a dividend of $3.55, $4.65, and $5.85 per share for each of the next three years, respectively. In fo

ur years, you believe that the company will be acquired for $53.00 per share. The return on similar stocks is 9.9 percent. What is the current stock price?
Multiple Choice

$61.72

$53.63

$51.10

$47.45

$47.82
Business
1 answer:
german3 years ago
8 0

Answer:

price = $47.82

Explanation:

Find the present value of each dividend at the required rate of return and sum them up to get the current price;

PV = FV /(1+r)^n

PV(D1) = 3.55/ (1.099^1) = 3.2302

PV(D2) = 4.65/ (1.099^2) = 3.8500

PV(D3) = 5.85 / (1.099^3) = 4.4072

PV(Price at t=4) = 53 / (1.099^4) = 36.3316

Price = 3.2302+2.9392+4.4072+36.3316

= 47.81897

Therefore, price = $47.82

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If nominal gdp is $12 trillion and real gdp is $10 trillion, then the gdp deflator is
Juli2301 [7.4K]
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6 0
2 years ago
Le Place has sales of $439,000, depreciation of $32,000, and net working capital of $56,000. The firm has a tax rate of 34 perce
Dennis_Churaev [7]

Answer:

Explanation:

Sales$439,000

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5 0
3 years ago
Beau Corporation sells a unit of its product for​ $250 per​ unit, while its variable costs per unit are​ $75. Fixed cost are bud
wolverine [178]

Answer:

Number of units that must be sold to earn the target profit is 3000 units.

The contribution margin ratio is 0.70

Explanation:

We will use the break even analysis modified for target profit to calculate the number of units needed to earn the desired

The break even point in units is calculated by dividing the fixed cost by the contribution margin per unit. To calculate the number of units required to earn the desired profit, we add the desired profit to fixed cost and divide it by the contribution margin per unit.

Contribution margin per unit = 250 - 75  =  $175

Number of units required to earn target profit = (325000 + 200000) / 175

Number of units required to earn target profit = 3000 units

The contribution margin ratio is = 175 / 250   =  0.7 or 70%

Dollar Sales required to earn target profit = $4,812,500

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Answer – Contests

 

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