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Natalka [10]
3 years ago
13

Crystal Glass recently paid $3.60 as an annual dividend. Future dividends are projected at $3.80, $4.10, and $4.25 over the next

three years, respectively. Beginning four years from now, the dividend is expected to increase by 3 percent annually. What is one share of this stock worth to you today if you require a 12.5 percent rate of return on similar investments?
Business
1 answer:
lora16 [44]3 years ago
6 0

Answer:

$41.96

Explanation:

The first thing you need to do is to calculate terminal value at the end of time t = 3. Then the intrinsic value of the stock is sum of discounted cashflow from t =1 to t = 3 (cashflows at t = 3 includes dividend as well as terminal value).

Terminal value at t = 3 = Dividend in year 4/(Required rate of return - Dividend growth)

                                     = 4.25 x (1 + 3%)/(12.5% - 3%)

                                     = 46.08

Then value of the stock is calculated as below:

Stock intrinsic value = 3.8/(1 + 12.5%) + 4.1/(1 + 12.5%)^2 + (4.25 + 46.08)/(1 + 12.5%)^3

                                  = 41.96

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Which common saying best captures the concept of incentives (specifically, positive and negative incentives), which is one of th
lesantik [10]

Answer:

If the carrot doesn't work, try the stick.

Explanation:

This phrase clearly describes how advertising and promotions work:

If the carrot doesn't work: the tempting carrot refers to advertisement, and the doesn't work part refers to advertisement that is not able to change consumer habits and increase sales.

Try the stick refers to offering promotions or positive incentives like discounts or larger packs.

Another example would be the penalty imposed on individuals that refused to purchase health care insurance (eliminated in 2018). The carrot were the benefits obtained by having health insurance and the stick was the negative incentive (or penalty) imposed as a fine for those who didn't purchase health insurance.

6 0
3 years ago
________ and ________ are typically the most easily identifiable aspects of a company's business model.
Ket [755]

The parts of a company's business model that are often easiest to identify are market strategy and market opportunity.

A market opportunity is a newly identified demand that a company could use to grow; often, this is because competitors aren't filling it.

A marketing strategy is a long-term plan for achieving a company's goals through comprehending customer needs and creating a distinct, sustainable competitive advantage. Everything is covered, from selecting the channels to use to get in touch with your customers to identifying them.

The target market for the venture, a competitive analysis, marketing strategies, estimated launch expenses, and funding sources should all be included in the business model of a new company.

For more information, Market strategy and market opportunity

brainly.com/question/28305473

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3 0
2 years ago
Item 1Item 1 Weismann Co. issued 11-year bonds a year ago at a coupon rate of 11 percent. The bonds make semiannual payments and
Mamont248 [21]

Answer:

Price of the bond is $940.

Explanation:

Price of bond is the present value of future cash flows. This Includes the present value of coupon payment and cash flow on maturity of the bond.

As per Given Data

As the payment are made semiannually, so all value are calculated on semiannual basis.

Coupon payment = 1000 x 11% = $110 annually = $55 semiannually

Number of Payments = n = 11 years x 2 = 22 periods

Yield to maturity = 12% annually = 6% semiannually

To calculate Price of the bond use following formula of Present value of annuity.

Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]

Price of the Bond =$55 x [ ( 1 - ( 1 + 6% )^-22 ) / 6% ] + [ $1,000 / ( 1 + 6% )^22 ]

Price of the Bond = $55 x [ ( 1 - ( 1.06 )^-22 ) / 0.06 ] + [ $1,000 / ( 1.06 )^22 ]

Price of the Bond = $662.29 + $277.5

Price of the Bond = $939.79 = $940

8 0
3 years ago
Spacefood Products will pay a dividend of $ 2.25 $2.25 per share this year. It is expected that this dividend will grow by 3 3​%
gavmur [86]

Answer:

$32.14 per share

Explanation:

The computation of the current value of the single share is shown below:

= Current year dividend ÷ (Required rate of return - growth rate)

where,

Current year dividend is $2.25 per share

Required rate of return is 10%

And, the growth rate is 3%

So by placing these items, the current value is

= $2.25 ÷ (10% - 3%)

= $32.14 per share

7 0
3 years ago
Frances loves shopping for clothes, but considering the state of the economy, she has decided to start saving. At the end of eac
Shtirlitz [24]

Answer:

Future Value= $4,189.30

Explanation:

Giving the following information:

Investment= $700 annual

Interest rate= 9%

Frances decides that she will continue to do this for the next 5 years.

To calculate the final value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {700*[(1.09^5)-1]} / 0.09

FV= $4,189.30

7 0
3 years ago
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