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vovangra [49]
3 years ago
9

Burnett Corp. pays a constant $8.25 dividend on its stock. The company will maintain this dividend for the next 13 years and wil

l then cease paying dividends forever. If the required return on this stock is 11.2 percent, what is the current share price
Business
2 answers:
Valentin [98]3 years ago
6 0

Answer:

$55.134

Explanation:

Given

dividend paid on its stock = $8.25

Duration is next 13 years

P0 = dividend on its stock × (PVIFA of return on this stock,years)

Remember PVIF = (1 - (1 + r)^-n)/r

Where PVIFA = present value interest factor of annuity

r = interest rate per period

n = number of periods

Therefore

P0 = $8.25 × (PVIFA11.2%,13)

P0 = $55.134

Elina [12.6K]3 years ago
4 0

Answer:

$54.99

Explanation:

D = $8.25

R = 11.25

n =13

Perpetuity Formula is to be used

P0 = sum of discounted dividends

      =D/1+r ^n     =8.25/(1.1125)^1+8.25/(1.1125)^2+8.25/(1.1125)^3+8.25/(1.1125)^4+8.25/(1.1125)^5+8.25/(1.1125)^6+8.25/(1.1125)^7+8.25/(1.1125)^8+8.25/(1.1125)^9+8.25/(1.1125)^10+8.25/(1.1125)^11+8.25/(1.1125)^12+8.25/(1.1125)^13

      =$54.99

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The purchases discount account or discounts received account.
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3 years ago
For each of the following statements, draw a diagram that illustrates the likely effect on the market for eggs. Indicate in each
zlopas [31]

Answer:

Please find the diagrams in the attached images

Explanation:

A) If a surgeon warns that high-cholesterol foods cause heart attacks, the demand for eggs would fall because eggs are high in cholesterol. The fall in demand would shift the demand curve to the left , price and quantity would fall.

B. Complementary goods are goods consumed together. If the price of a complementary good falls, the demand for the other good increases. If the price of bacon falls, the demand for eggs would increase. The demand curve would shift to the right, the price and quantity would increase.

C. If the price of chicken feed increases, the cost of producing eggs increases and the quantity supplied falls. The supply curve shifts to the left, prices rise and quantity falls.

D. If Caesar salad becomes more trendy, the demand for eggs increases. The demand curve shifts to the right, price and quantity increases.

E. Technological innovation would increase the quantity supplied. The supply curve would shift to the right, price falls and quantity increases.

I hope my answer helps you

3 0
2 years ago
Wilbur decides to sell his collection of rare stamps on eBay when he is filling out the information for his item he types $40 in
LenaWriter [7]

Answer:

Explanation:

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7 0
3 years ago
Wage paid rs 6000 through bank to mr.arjun​
gizmo_the_mogwai [7]
What’s the question? i could help if there was a question !!
7 0
3 years ago
g A foreign factory has offered to supply with ready-made baskets for a price of $12 per basket. Assume that fixed costs are una
cluponka [151]

Answer:

The answer is "$5500".

Explanation:

Analysis Differential:  

                                             Make                            Buy

Cost of variable                        800\times 7 \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ = 5600  

Fixed- cost                             16000\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 16000

Purchasing cost                                                    800\times 12\ = 9600

Cost of opportunity            \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \ 9500  

Total relevant cost                    31100 \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \  25600

Increasing operating income = 31100-25600 = 5500

4 0
2 years ago
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