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Vinvika [58]
3 years ago
5

What is the market value of a stock that paid a dividend of $3.80 last year if the dividend is increasing at 10% annually and th

e required rate of return on the stock is 20%
Business
1 answer:
Papessa [141]3 years ago
7 0

Answer:

The market value of the stock is $41.8

Explanation:

Div 1 = Div 0 (1+r)

=3.80 (1+0.10)

=3.80(1.10)

=4.18

Market value of the stock= Dividend 1 / (r-g)

= 4.18 / 0.2 - 0.1

= 4.18 / 0.1

= $41.8

The market value of the stock is $41.8

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8 0
2 years ago
The financial statements of the Pharoah Company report net sales of $372000 and accounts receivable of $56400 and $27600 at the
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Answer:

the average collection period for accounts receivables is 41.2 days

Explanation:

Average Collection Period measures the amount of time it takes to collect credit from accounts owing.

Average Collection Period = Average Accounts Receivables / (Sales/365)

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                                            = $42,000/1019.178082

                                            = 41.20967742

                                            = 41.2 days

                             

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