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Vedmedyk [2.9K]
3 years ago
9

A stock is expected to pay a dividend of $0.5 at the end of the year (D1=0.5), and it should continue to grow at a constant rate

of 7% a year. If its required return is 12%, what is the stock’s expected price 5 years from today?
Business
2 answers:
Alex_Xolod [135]3 years ago
7 0

Answer:

You can Derive the answer like this. Using simple dendritic growth model.

$0.5 / (12% - 7%) = $10

Now to get the expected price 5 years from today, do this: $10 x (1 + 7%)^5 = $14.03

What we did was we used the annual growth rate and calculates the growth over the next 5 years.

Explanation:

vlada-n [284]3 years ago
3 0

Answer:

The stock’s expected price 5 years from today is $14.03

Explanation:

Today's stock price: $0.5 / (12% - 7%) = $10

Because the stock should continue to grow at a constant rate of 7% a year, the stock’s expected price 5 years from today: $10 x (1 + 7%)^5 = $14.03

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Karo-lina-s [1.5K]

Answer:

the FICO score

Explanation:

The FICO Score helps the lenders to determine the how is the borrower likely to repay the loan. It is used to determine the creditworthiness and the lenders take a FICO score of the borrower into the account and also consider details like income and other things.

FICO Score helps the lenders make smarter as well as quicker decisions.

The Fair Isaac Corporation (FICO) the score to provide industry-standard for the scoring creditworthiness.

4 0
3 years ago
On July 1, 2019, Sunland Company purchased new equipment for $80,000. Its estimated useful life was 5 years with a $10,000 salva
Paraphin [41]

Answer:

On December 31,2019

Depreciation expense Dr $7,000

          To Accumulated depreciation $7,000

(Being the depreciation expense is recorded)

Explanation:

The journal entry is shown below;

On December 31,2019

Depreciation expense Dr $7,000

          To Accumulated depreciation $7,000

(Being the depreciation expense is recorded)

The computation is shown below:

= ($80,000 - $10,000) ÷ 5 years × 6 months ÷ 12 months

= $7,000

For recording this we debited the depreciation expense as it increased the expenses and decreased the assets so the accumulated depreciation is credited

And, the six months is taken from July 1 to December 31

     

4 0
3 years ago
Polk Company manufactures basketballs. Materials are added at the beginning of the production process and conversion costs are i
wariber [46]

Answer and Explanation:

The computation is shown below:

a.

1. Calculation of the equivalent units

<u>Particulars         Physical units   %     Material   %      Conversion cost</u>

Units transferred

out                          900             100%    900     100%     900

Ending

work in process     600            100%     600     40%       240

Equivalent

units                                                        1,500                  1,140

2. Cost per equivalent unit is

Particulars         Material      Conversion cost

Beginning

inventory           $750               $600

Cost during

period                $2,400            $2,820

Total cost          $3,150             $3,420

Divided by

Equivalent

units                   $1,500            $1,140

Cost per

equivalent unit    $2.1              $3

3. Transferred out cost is

= (3 + 2.1) × 900

= $4,590

And, the ending work in process cost is

= (600 ×$2.1) + (240 × $3)

= $1,960

2. Now the preparation of the production report is presented below:

Beginning work in process       $1,350

Cost during period                    $5,220

Total cost accounted for           $6,570

Transferred out cost                   $4,590

Ending work in process              $1,960

Total cost accounted as             $6,570

3 0
3 years ago
Which type of marketing intermediary are sales representatives of manufacturers and wholesalers?
Len [333]

Answer:

C. Agents

Explanation:

They are sales representatives for manufacturers or wholesalers and usually are hired on a commission basis.

6 0
2 years ago
Sunland’s Shop can make 1000 units of a necessary component with the following costs: Direct Materials $21000 Direct Labor 6000
algol13

Answer:

$9,000

Explanation:

Total variable cost of manufacturing the components are as follows;

Direct materials $21,000

Direct labor 6,000

Variable overhead 3,000

————

Total $30,000

If we purchase the cost is $39,000 and the company is indifferent if they will manufacture or purchase. Therefore;

$39,000 - 30,000 = $9,000 (unavoidable fixed cost)

7 0
2 years ago
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