Answer:
The answer is 6.17%.
Explanation:
We apply the Dividend Model for solving the questions.
Denote g as the constant dividend growth rate after 3 years which needs to be found.
The principle in the Dividend model is: Current share price = Projected present value of all expected future dividend discounted at company's cost of equity rs =16%.
Thus Current share price = Present value of Dividend paid in Y1 + Present value of Dividend paid in Y2 + Present value of Dividend paid in Y3 + Present value of dividend perpetuity growth after Y3.
=> 51 = (3 x 1.25) / 1.16^1 + (3 x 1.25^2)/ 1.16^2 + (3 x 1.25^3)/1.16^3 + [3 x 1.25^3 x (1+g)]/(0.16-g)/1.16^3 <=> [5.8594 x (1+g)]/(0.16-g)/1.16^3 = 40.5298 <=> [5.8594 x (1+g)]/(0.16-g) = 63.2628 <=> 5.8594 + 5.8594g = 10.1220 - 63.2628g <=> 69.1222g = 4.2626 <=> g = 6.17%.
Thus, the constant rate the stock's dividend expected to grow after Year 3 is 6.17%
Answer:
C). Obsolescence
Explanation:
Obsolescence is defined as the 'state of being obsolete or no longer in use' as the better alternate options become available in the market which possesses the ability to offer higher productivity. It is 'the expected consequence of a technology that enhances briskly and alternative service options with upper quality become accessible.' The producers are more likely to switch to the alternate not always due to the uncompetitiveness of the present technology but also due to the higher advantages and yielding capacity of the new option. Thus, <u>option C</u> is the correct answer.
Answer:
The amount of cash received will be $6039
Explanation:
The amount of cash received on January 24 will be the net amount after deducting the sales returns and the discount allowed as the payment is made within 10 days period of the sale and the terms 1/10 states a 1% discount if payment is made within 10 days.
The net value of receivables after sales returns = 7000 - 900 = 6100
The discount allowed = 6100 * 1% = 61
Cash to be received = 6100 - 61 = $6039
Answer:
$42,000
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net change in cash is as a result of the flow of cash within these activities.
Given that cash inflows from operations of $64,000; cash outflows from investing activities of $48,500; and cash inflows from financing of $26,500,
Net change in cash
= $64,000 - $48,500 + $26,500
= $42,000