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mariarad [96]
3 years ago
10

Analysts are forecasting LifeTech Corporation's common stock price to be $120 at the end of one year. Also, LifeTech will pay a

dividend of $2.60 one year from now. You plan to buy the stock now and sell at the end of one year. If you require a 13% return, what would you be willing to pay to buy the stock now
Business
1 answer:
devlian [24]3 years ago
5 0

Answer:

Price to pay now for the stock = $96.278

Explanation:

<em>The price of the stock would be the present value(PV) of the future cash flow expected from it discounted at the required rate of 13%</em>

<em>Hence we would add the present value of he dividend and the resent of he price at the end of the period</em>

PV = CF × (1+r)^(-n)

<em>CF- Cash Flow</em>

<em>R- rate of return- 13%</em>

<em>n- number of years</em>

PV of dividend =  2.60 × (1.13)^(-1) =  2.30

PV of stock price after a year = 120× (1.13)^(-1) = 93.97

Price to pay now for the stock =  2.30 + 93.97 = $96.278

Price to pay now for the stock = $96.278

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The corporate charter of Alpaca Co. authorized the issuance of 10 million, $1 par common shares. During 2018, its first year of
garik1379 [7]

Answer:

Additional paid-in capital‒ excess of par=

8,000,000*(15-1)=112,000,000

-2,000,000*(18-1)=34,000,000

+2,000,000(20-1)=38,000,000

=184,000,000

Explanation:

6 0
3 years ago
Suppose there exists a market for coffee that is in equilibrium at 500 cups brewed per week for $3/cup. Now suppose the demand f
Anton [14]

Answer:

Increase in Substitute good price , Decrease in Complementary Good price, Fall in Income , Taste & preferences change in favour of good.

Explanation:

Demand is the ability & willingness of consumer to buy a product at a price , period of time.

There are four factors affecting Demand with following relationships with it : Price of Good (inversely related) , Price of related goods (substitutes-directly related) & (complements-inversely related), Income (directly related) , Taste & preferences (depends).

Any Change in 'Quantity Demanded' due to change in good's own price leads to movement on the demand curve (contraction or expansion). Any 'Change in Demand' due to factors other than price shifts the demand curve (rightwards or leftwards).

So : Increase in substitute good's price (eg- tea) price makes coffee relatively cheaper, Decrease in complementary good's price (eg - sugar/milk) makes coffee altogether cheaper, taste & preference change in favour of coffee consumption (eg- people learning advantages of caffaine consumption). All these mentioned Increase the Demand for coffee & shifts its curve rightwards.

7 0
3 years ago
What do many economists blame for the severity of the great depression?
Nat2105 [25]
It seems that you have missed the necessary options for us to answer this question, but anyway, hope this answer helps. What economists blame for the severity of the Great Depression is the <span>expansion of the currency by the Federal Reserve System. Hope this answers your question.</span>
5 0
3 years ago
An upscale restaurant offers a special fixe prix menu in which, for a fixed dinner cost, a diner can select from four appetizers
Oxana [17]

I guess the answer is 240.

By the <em>mn</em> rule, there are 240 different dinners that are available since,

4×3×4×5 = 240 different dinners


3 0
3 years ago
Under the weighted-average method, the cost of units transferred out of a department is computed as follows for a cost category:
Roman55 [17]

Answer:

B. Units transferred to the next department × Cost per equivalent unit

Explanation:

Cost per equivalent unit refers to the cost of each completed unit possible.

As there is not only the units which are complete, but newly introduced and those in work in progress, and therefore, the cost of each equivalent unit is calculated so that it computes the cost for each unit.

Accordingly, all the units which are completed and transferred to another department are complete and the equivalent cost of completion of each unit shall be allocated to those units.

Therefore, correct option is:

Option B.

5 0
3 years ago
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