1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
sineoko [7]
3 years ago
13

a mature manufacturing firm. The company just paid a dividend of $8.65, but management expects to reduce the payout by 5 percent

per year indefinitely. If you require a return of 12 percent on this stock, what will you pay for a share today?
Business
1 answer:
-BARSIC- [3]3 years ago
4 0

Answer:

$48.34%

Explanation:

Data provided in the question

Growth rate = 5%

Required return = 12%

Dividend = $8.65

Based on the above information,

The computation of the current price is shown below:-

Current Price = Dividend × (1 + Growth Rate) ÷ (Required Return - Growth Rate)

= $8.65 × (1 + (-5%)) ÷ (12% - (-5%))

= $48.34%

Therefore for computing the current price we simply applied the above formula.

You might be interested in
Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H rep
anastassius [24]

Answer:

USING 0% DISCOUNT RATE

PROJECT E

Year Cashflow [email protected]%     PV

             $                  $

0            (23,000) 1  (23,000)

1             5,000         1         5,000

2                  6000           1              6,000

3      7000          1              7,000

4                 10,000           1              10,000

                                               NPV  5,000

                   PROJECT H

Year Cashflow [email protected]%     PV

             $                  $

0            (25,000) 1  (23,000)

1             16,000 1         16,000

2                  5,000          1              5,000

3      4,000          1              4,000

                                               NPV  2,000

Project A should be accepted

USING 9% DISCOUNT RATE

Year Cashflow [email protected]%           PV

             $                      $

0            (23,000) 1        (23,000)

1             5,000         0.9174         4,587

2                  6000           0.8462            5,077

3      7000          0.7722             5,405

4                 10,000           0.7084            7,084

                                                       NPV   (847)

PROJECT H

Year Cashflow [email protected]%            PV

             $                        $

0            (25,000) 1         (23,000)

1             16,000 0.9714         15,542

2                  5,000          0.8462            4,231

3      4,000          0.7722            3,089

                                                     NPV    (138)

None of the projects should be accepted because they have negative NPV

Explanation:

The question requires the computation of NPV using 0% and 9%.

The cashflows of the two projects will be discounted at 0% and 9%.

The discount factors for each project can be calculated using the formula (1+r)-n. The cashflows of the projects will be multiplied by the discount factors to obtain the present values. NPV is the difference between present values of cash inflows and initial outlay.

7 0
3 years ago
Shirley was laid off by her employer. What benefit is she entitled to receive?
belka [17]

She would receive unemployment

7 0
3 years ago
As a project manager, the project is your number one priority. However, you have team members with competing priorities from oth
kaheart [24]

As per the given scenario, the interpersonal skill that should be used is negotiating effectively.

<h3>Who is a project manager?</h3>

A project manager refers to the person who is in overall charge of the planning and execution of a particular project.

As a project manager, the project is on number one priority. The interpersonal skill that is mainly used in this scenario is negotiating effectively.

Learn more about project manager here:

brainly.com/question/15610382

#SPJ1

4 0
2 years ago
Sum Company has reminded Innovation Marketing of the limitations of their budget. Innovation Marketing reviewed the marketing pl
posledela

A planning process is ongoing when there is a review of the marketing plan to prompt Sum Company to look at the relationship between analysis and determination.

<h3>What is a planning process?</h3>

This refers to the necessary steps taken by a company to develop its budgets to guide its future activities.

Hence, a planning process is ongoing when there is a review of the marketing plan to prompt Sum Company to look at the relationship between analysis and determination.

Read more about planning process

<em>brainly.com/question/25453419</em>

#SPJ1

4 0
2 years ago
Suppose that the following group of values has been entered into the TVM
Nezavi [6.7K]

The bal() function that is going to balance the loan after a period of 9 years would be  A. bal(108)

<h3>How to solve for the bal() function</h3>

The question tells us that the loan balance would be calculated after the period of 9 years.

We have 12 months yearly in all of these 9 years.

Hence the function would be bal(12*9)

= bal(108)

Read more on functions here:

brainly.com/question/25638609

#SPJ1

5 0
1 year ago
Other questions:
  • Suppose that nominal gdp is $1,000 in 2009 and $1,500 in 2010. if the overall price level _____ between 2009 and 2010, we could
    13·1 answer
  • Which of these situations produces the largest profits for oligopolists? a. The firms reach a Nash equilibrium. b. The firms rea
    7·1 answer
  • Which of the following refers to a process that first determines what information marketing managers need and then​ gathers, sor
    5·1 answer
  • Klean Fiber Company is the creator of Y-Go, a technology that weaves silver into its fabrics to kill bacteria and odor on clothi
    7·1 answer
  • Justin, an American sales manager, travels to Brazil to make a business presentation. His counterpart, Pedro, does not speak Eng
    9·1 answer
  • Spree Company sold $769,300 of goods during the year at a cost of goods sold of $548,600. Inventory was $31,283 at the beginning
    14·1 answer
  • What describes items of a tenant's personal property that the tenant has temporarily affixed to a landlord's real property in or
    6·1 answer
  • John Hernandez is 24 years old and has saved enough money to fund an adequate emergency fund. In addition, he has saved $5,600 t
    9·1 answer
  • Comparing text and lecture notes helps the student to find the similarities among important topics that may be on a test. Please
    6·2 answers
  • Where can tourist obtain travel vaccinations​
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!