1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
defon
4 years ago
13

Barn Wood Interiors announced today that it is going out of business. As of today, no more regular dividends will be paid. The f

irm will, however, pay two liquidating dividends. The first will be paid one year from now in the amount of $14 a share. The second and final payment will be paid two years from now at an estimated $38 a share. What is the value of this stock today at a discount rate of 18.7 percent?
Business
1 answer:
Sonja [21]4 years ago
3 0

Answer:

The stock price today is $38.76 as shown below

Explanation:

The value of the stock today is the present value of all future dividend payments from the stock.

Present value of first dividend=$14/(1+18.7%)^1

                                                  =$11.79443976

Present of second dividend=$38/(1+18.7%)^2

                                              =$26.97007528

The stock price today is the sum of the present values=11.79443976 +26.97007528 =$38.76

Ordinarily, the valuation would have included the price at which the stock could be sold but since the company is wounding up and the only cash flow is payment of liquidating dividends, the price at which stock can be sold is not applicable.

You might be interested in
Sales for a _________ product begin immediately after introduction because the benefits of purchase are readily understood by co
algol [13]

Answer:

low-learning

Explanation:

Low Learning product is the product whose sales immediately begin because a little learning of the product is required by consumer and the benefits from the product are readily tangible.

Their sales begin quickly due to simplicity of product. This simplicity of product allows the consumers to understand product almost right away.

Example of low-learning product which has been successful is the Red Bull Drink. Consumers understand the need of the drink and is purchased in huge amounts.

6 0
3 years ago
Kerry, Inc., exchanged land and cash of $8,900 for equipment. The land had a book value of $64,000 and a fair value of $69,900.
kipiarov [429]

Answer:

Explanation:

The journal entry is shown below:

Equipment A/c Dr $78,800

    To Gain on exchange A/c  $5,900                      

    To Land A/c $64,000

    To Cash A/c $8,900

(Being the exchange is recorded and the remaining balance is credited to the gain on exchange account)

The equipment value is computed below:

= Fair value + exchange value

= $69,900 + $8,900

= $78,800

3 0
4 years ago
Which of the following is the best example of a law
IceJOKER [234]
The best example of a law is D
5 0
2 years ago
All of the following are documents used for inventory control except:______.
damaskus [11]

Answer:

c. a petty cash voucher.

Explanation:

For controlling the inventory following documents are to be used i.e.

1.  Purchase order

2.  Vendor invoice

3. Receiving report

These three documents we called as an voucher package

But it does not involved the petty cash voucher

Therefore the correct option is c.

And, the same is to be considered

8 0
3 years ago
A divestiture order is a decree ordering a defendant to dispose of excessive ownership or control of interests in competing ente
Readme [11.4K]

Answer: True

Explanation:

This kind of order obligates the sale or liquidation of a subsidiary company, especially and it is especially forced by some governing authority.

6 0
4 years ago
Other questions:
  • Consider a two-firm oligopoly facing a market inverse demand curve of P = 100 – 2(q1 + q2), where q1 is the output of Firm 1 and
    14·1 answer
  • All analysis of variance procedures require that the compared populations have equal variances.
    12·1 answer
  • Under the de minimis exemption, an initial public offering of common stock may be sold to an account where restricted persons ha
    10·1 answer
  • A(n) ________ is a type of intelligent technique that finds patterns and relationships in massive data sets too large for a huma
    14·1 answer
  • A number of yogurts are marketed under the Dannon brand, including Dannon All Natural, Dannon Fruit on the Bottom, Dannon Light
    15·1 answer
  • Define what is meant by the phrase "planning materiality threshold"
    14·1 answer
  • Anne LLC purchased computer equipment (five-year property) on August 29 for $30,000 and used the half-year convention to depreci
    14·1 answer
  • Jarett Motors is trying to decide whether it should keep its existing car washing machine or purchase a new one that has technol
    6·1 answer
  • Suppose there are two economies, Alpha and Beta, which have the same production possibilities curves and are on the same point o
    5·1 answer
  • Leslie studies how individuals go about purchasing products for their personal consumption and what factors influence these deci
    11·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!