Answer:
current intrinsic value per stock = $26.35
Explanation:
year dividend EPS
0 0 $18
1 0 $20.88
2 0 $24.22
3 0 $28.10
4 0 $32.59
5 0 $37.81
6 $12.59 $41.97
growth rate up to year 5 = 16%
ROE growth rate starting year 6 = 11%
dividend growth rate starting year 6 = 11% x (1 - 30%) = 7.7%
cost of equity = 24%
horizon value at year 5 = $12.59 / (24% - 7.7%) = $77.24
current intrinsic value per stock = $77.24 / 1.24%⁵ = $26.35
Answer:
Ben would pay more in taxes.
Explanation:
A progressive income tax increases the tax rate as the taxpayer earns more money.
In this case, Ben would be taxed as earnings $60,000 which is probably a much higher tax rate than the applicable one for $30,000. If we use the current tax brackets for 2020, Ben would fall under the 22% tax bracket while both Cathy and Dylan would fall under the 12% tax bracket. Obviously Ben would pay much more in taxes.
Answer:
a.Susan is wrong, and Mary is free to disclaim warranties.
Explanation:
According to the Magnuson-Moss Act the seller of a product may or may not provide warranty on a product. But is warranty is provided the following conditions must be met.
- The seller must provide a full or limited warranty.
- The coverage of the warranty must be stated
- Warranty must be available to the customers, so that they can read it before making a purchase.
So Mary can choose to disclaim all warranties on her products, not making her liable for any defects found in them. But if she wants to provide warranty it must be written and follow the conditions stated above.
