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lidiya [134]
3 years ago
15

A high growth software company will pay its first dividend of S0.30 next year. This dividend of . After that, the growth will $0

.30 will grow at a rate of 10% for four years until the end of year 5 slow down to 5% forever. The required rate of return is 15%. What is the price of the stock today?
A. $3.49
B. $3.57
C. $3.65
D. $3.81
E. $4.02
Business
1 answer:
bija089 [108]3 years ago
3 0

Answer:

The price of the stock today is $3.49. The right answer is A.

Explanation:

In order to calculate the price of the stock today, we need to calculate first Value after year 5 with the following formula:

Value after year 5=(D5*Growth Rate)/(Required return-Growth Rate)

To find D5 we need to make the following calculations:

IF D1=0.3 , hence D2=(0.3*1.1)=0.33 , D3=(0.33*1.1)=0.363 , D4=(0.363*1.1)=0.3993 and D5=(0.3993*1.1)=0.43923

Therefore, Value after year 5=(0.43923*1.05)/(0.15-0.05) =$4.611915

Therefore, now we can calculate the the price of the stock today with the following formula:

current price=Future dividends and value*Present value of discounting factor(rate%,time period)

=0.3/1.15+0.33/1.15^2+0.363/1.15^3+0.3993/1.15^4+0.43923/1.15^5+$4.611915/1.15^5

=$3.49

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Stella [2.4K]

The correct answer to fill in the blank is:

This is a <u>“fixed-ratio” </u>schedule.

The fixed-ratio schedule is one of the schedules of reinforcement conditioning. This type of reinforcement is rewarded when a specified or fixed number of responses is achieved. In this example, when Scott reaches 25,000 miles, he gets a $airline ticket.

 

3 0
4 years ago
Kari is a limited partner in Lizard Partnership. This year, Kari's share of partnership ordinary income is $20,000, and she rece
kogti [31]

Answer: a. $3520

b. $26480

c. $40000

Explanation:

a. Calculate the tax cost of Kari's partnership earnings this year Tax cost

Ordinary Income = $20000

Less: 199A deduction = 20% × $20000 = $4000

Ordinary Income share = $16000

The tax cost of Kari's partnership earnings this year Tax cost will be:

= 22% × $16000

= 0.22 × $16000

= $3520

b. Compute Kari's after-tax cash flow from her partnership activity this year After-tax cash flow

This will be:

= Cash distribution - Tax cost

= $30000 - $3520

= $26480

c. Compute Kari's tax basis in her partnership interest at the ending of the year. Assume no change in her share of partnership during the year.

Basis at start of year = $50000

Add: Ordinary income = $20000

Adjusted basis = $50000 + $20000 = $70000

Less: Cash distribution = $30000

End of year basis = $40000

5 0
3 years ago
What phrase could a licensee use in advertising that would not discriminate on the basis of familial status
Artist 52 [7]

Senior discount is the phrase that a licensee could use in advertising that would not discriminate.

A familial status discrimination is known to occurs when the landlord, manager  or property owner treats someone very differently.

The other options clearly discriminate the familial status.

Hence, the Senior discount is the phrase that a licensee could use in advertising that would not discriminate.

Therefore, the Option is correct.

Missing options <em>"Couples only Empty nesters No bicycles allowed Senior discount"</em>

<em />

Read more about Discount

<em>brainly.com/question/912869</em>

6 0
3 years ago
Teresa has a contract to teach eighth grade at Washington Middle School. She decided she could make more money writing a book, s
kari74 [83]

Answer:

The duties under the teaching contract cannot be delegated

Explanation:

The person wit whom the school has a binding agreement was Teresa and contract of services cannot be delegated unilaterally by Teresa to her friend Shirley without consulting the school authority.

The appropriate procedure would be for Teresa to discuss with the school her plans to let Teresa to cover up for her absence,however, if the school accepts the new arrangement , Teresa would need to be relieved of her duties as this would be a permanent substitution.

8 0
3 years ago
Serena Corporation uses estimated manufacturing overhead costs of​ $880,600 and estimated direct labor hours of​ 200,000 in esta
Deffense [45]

Answer:

the actual hours were 229,866

Explanation:

\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate

the predetermined overhead rate will be the quotient between the expected overhead and the expected value of the cost driver.

880,600 / 200,000 = 4.403

If we allocated 1,012,100

then actual hours x 4.403 = 1,012,100

actual hours = 1,012,100 / 4.403 = 229.866,000

the actual hours were 229,866

7 0
3 years ago
Read 2 more answers
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