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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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serg [7]

Answer:

OD. A person who goes to earn a college degree will have to pay the full costs of going to college

4 0
1 year ago
An investment project has annual cash inflows of $4,300, $4,000, $5,200, and $4,400, for the next four years, respectively. The
xeze [42]

Answer:

1.64 years

2.27 years

3.13 years

Explanation:

Discounted payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative discounted cash flows

Present value of cash flow in year 1 = 4300 / 1.13 = 3805.31

Amount recovered in year 1  = -5800 + 3805.31 = -1994.69

Present value of cash flow in year 2 = 4000 / (1.13^2) = 3132.59

Amount recovered in year 2 =-1994.69 + 3132.59 = 1137.90

Payback period = 1 + 1994.69/3132.59 = 1.64 years

B

Present value of cash flow in year 1 = 4300 / 1.13 = 3805.31

Amount recovered in year 1  = -7900 + 3805.31 = -4094.69

Present value of cash flow in year 2 = 4000 / (1.13^2) = 3132.59

Amount recovered in year 2  = -4094.69 + 3132.59 = -962.10

Present value of cash flow in year 3 = 5200 / (1.13^3) = 3603.86

Amount recovered in year 3  = -962.10 + 3603.86 = 2641.76

Payback period = 2 years + -962.10 / 3603.86 = 2.27 years

C

Present value of cash flow in year 1 = 4300 / 1.13 = 3805.31

Amount recovered in year 1  = -10900 + 3805.31 = -7094.69

Present value of cash flow in year 2 = 4000 / (1.13^2) = 3132.59

Amount recovered in year 2  = -7094.69 + 3132.59 = -3962.10

Present value of cash flow in year 3 = 5200 / (1.13^3) = 3603.86

Amount recovered in year 3  = -3962.10 + 3603.86 = -358.24

Present value in year 4 =  4400 / (1.13^4) = 2698.60

Amount recovered in year 4  = -358.24 + 2698.60 = 2340.36

Payback period = 3 years + 358.24 + 2698.60 = 3.13 years

7 0
2 years ago
Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends.
kifflom [539]

Answer:

P₀ = $12.23

Explanation:

Div₃ = $1.25

Div₄ = $1.65

Div₅ = $2.178

Div₆ = $2.30868

first we must calculate the terminal value using the dividend discount model = $2.30868 / (17% - 6%) = $20.988

now we must discount all the future dividends + terminal value

P₀ = $1.25/1.17³ + $1.65/1.17⁴ + $2.178/1.17⁵ + $20.988/1.17⁵ = $12.23

5 0
2 years ago
__________ capital increases cooperation among individuals inside and outside the firm. a. Human b. Visionary c. Social d. Cultu
VARVARA [1.3K]

Social capital increases cooperation among individuals inside and outside the firm.

What is social capital ?

Social capital allows a group of people to work together effectively to achieve a common purpose or goal. It allows a society or organization, such as a corporation or a nonprofit, to function together as a whole through trust and shared identity, norms, values, and mutual relationships.

What is the social capital theory?

Social capital theory contends that social relationships are resources that can lead to the development and accumulation of human capital. For example, a stable family environment can support educational attainment and support the development of highly valued and rewarded skills and credentials.

Learn more about Human capital :

brainly.com/question/21804032

#SPJ4

4 0
1 year ago
Ken owns a food services company and recently negotiated a contract with a new restaurant chain. the satisfaction ken feels for
erastova [34]

Answer:

Ken owns a food services company and recently negotiated a contract with a new restaurant chain. the satisfaction ken feels for this success is a(n)<u> intrinsic  motivator.</u>

Explanation:

Intrinsic motivation can be defined as a kind of positivity in a person which he/she feels by doing any work of their choice. The person is satisfied internally with the work he or she chooses to do. In intrinsic motivation, the person is motivated to do a work that will satisfy himself/herself rather than satisfying any external source.

For example: In the above question, Ken is satisfied because she runs a food service company to make herself happy and she negotiated a contract because she cares to do anything that makes her satisfied rather than any other person.

6 0
3 years ago
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