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astraxan [27]
3 years ago
9

Bon Chance, Inc., has an odd dividend policy. The company has just paid a dividend of $9.25 per share and has announced that it

will increase the dividend by $7.25 per share for each of the next four years, and then never pay another dividend.If you require a return of 14 percent on the company’s stock, how much will you pay for a share today?
Business
1 answer:
vova2212 [387]3 years ago
6 0

Answer:

= $76.32

Explanation:

Calculate the Dividend amount per year;

D1 = 9.25+ 7.25 = 16.5

D2 = 15.5+ 7.25 = 23.75

D3 =23.75 + 7.25 = 31

D4 = 31 + 7.25 = 38.25

Next, use the dividend amounts per year and the required return of 14% to find the price per share;

PV (of D1) = 16.5 / (1.14) = 14.4737

PV (of D2)= 23.75/ (1.14²) = 18.2749

PV (of D3) = 31 / (1.14³) = 20.9241

PV (of D4) = \frac{38.25}{(1.14)^{4} } = 22.6471

Sum up the PVs;

= 14.4737 + 18.2749 + 20.9241 + 22.6471

Price = $76.32

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Each machine must be run by one of 19 cross-trained workers who are each available 35 hours per week. The plant has 10 type 1 ma
Mrac [35]

Answer:

The Linear programming model is given as below

Profit Function: P=90X+120Y+150Z

Constraints:

2X+2Y+Z\leq 400

3X+4Y+6Z\leq 240

4X+6Y+5Z\leq 320

\dfrac{2X+2Y+Z}{40}\leq 10

\dfrac{3X+4Y+6Z}{40}\leq 6

\dfrac{4X+6Y+5Z}{40}\leq 8

\dfrac{2X+2Y+Z}{35}+\dfrac{3X+4Y+6Z}{35}+\dfrac{4X+6Y+5Z}{35}\leq 19

Explanation:

As the question is not complete, the complete question is found online and is attached herewith.

Let the number of product 1 to be produced is X, that of product 2 is Y and product 3 is Z

so  the maximizing function is the profit function which is given as

P=90X+120Y+150Z

Now as the number of hours in a week are 40 and there are a total of 10 type 1 machines so the total number of machine 1 hours are 40*10=400 hours

As from the given table product 1 uses 2 machine hours of machine 1, product 2 uses 2 machine hours of machine 1 and product 3 uses 1 hour of machine 1 so

2X+2Y+Z\leq 400

Now as the number of hours in a week are 40 and there are a total of 6 type 2 machines so the total number of machine 2 hours are 40*6=240 hours

As from the given table product 1 uses 3 machine hours of machine 2, product 2 uses 4 machine hours of machine 2 and product 3 uses 6 hour of machine 2 so

3X+4Y+6Z\leq 240

Now as the number of hours in a week are 40 and there are a total of 8 type 3 machines so the total number of machine 3 hours are 40*8=320 hours

As from the given table product 1 uses 4 machine hours of machine 3, product 2 uses 6 machine hours of machine 3 and product 3 uses 5 hour of machine 3 so

4X+6Y+5Z\leq 320

Now as the machine 1 is used as 2X+2Y+Z in a week and the week is of 40 hours so the number of machines to be used are given as

\dfrac{2X+2Y+Z}{40}\leq 10

Now as the machine 2 is used as 3X+4Y+6Z in a week and the week is of 40 hours so the number of machines to be used are given as

\dfrac{3X+4Y+6Z}{40}\leq 6

Now as the machine 3 is used as 4X+6Y+5Z in a week and the week is of 40 hours so the number of machines to be used are given as

\dfrac{4X+6Y+5Z}{40}\leq 8

Now the workers are available for 35 hours so the worker available at the machine 1 is given as

\dfrac{2X+2Y+Z}{35}

That of machine 2 is given as

\dfrac{3X+4Y+6Z}{35}

That of machine 3 is given as

\dfrac{4X+6Y+5Z}{35}

As the total number of workers is 19 so the constraint is given as

\dfrac{2X+2Y+Z}{35}+\dfrac{3X+4Y+6Z}{35}+\dfrac{4X+6Y+5Z}{35}\leq 19

So the Linear programming model is given as below

Profit Function: P=90X+120Y+150Z

Constraints:

2X+2Y+Z\leq 400

3X+4Y+6Z\leq 240

4X+6Y+5Z\leq 320

\dfrac{2X+2Y+Z}{40}\leq 10

\dfrac{3X+4Y+6Z}{40}\leq 6

\dfrac{4X+6Y+5Z}{40}\leq 8

\dfrac{2X+2Y+Z}{35}+\dfrac{3X+4Y+6Z}{35}+\dfrac{4X+6Y+5Z}{35}\leq 19

4 0
4 years ago
Stock R has a beta of 1.8, Stock S has a beta of 0.75, the expected rate of return on an average stock is 9%, and the risk-free
PIT_PIT [208]

Answer:

Stock R more beta than Stock S = 4.2%

Explanation:

given data

Stock R beta = 1.8

Stock S beta = 0.75

expected rate of return = 9% = 0.09

risk-free rate = 5% = 0.05

solution

we get here Required Return

Required Return (Re) = risk-free rate + ( expected rate of return - risk-free rate ) beta  ...........1

Required Return (Re) = 0.05 + ( 0.09 - 0.05 ) B

Required Return (Re) =

so here

Stock R = 0.05 + ( 0.09 - 0.05 ) 1.8

Stock R = 0.122  = 12.2 %

and

Stock S = 0.05 + ( 0.09 - 0.05 ) 0.75

Stock S =  0.08 = 8%

so here more risky stock is R and here less risky stock is S

Stock R is more beta than the Stock S.

Stock R more beta Stock S =  12.2 % - 8%

Stock R more beta Stock S = 4.2%

4 0
3 years ago
Richard makes monthly house payments that include a pro rated portion of real property taxes and insurance. The taxes and insura
cricket20 [7]

Answer:

Richard can deduct $1600 as real property tax during the current year.Only the tax amount paid by the mortgage company from the escrow account to taxing authority can be claimed as deduction.

3 0
4 years ago
Tara is shopping at a department store in the mall. before checking out she wants to make sure she brought enough money to pay f
finlep [7]
If Tara bought, sweater $ 52, T-shirt $19, Shoes $68, Jeans $72, Necklace $21, the total would be;
52+19+68+72+21 = 230
But a tax rate of 7% was included, 
Thus, 230 × 0.07 = 16.1
Therefore, the total amount is 230+16.1 = 246.1
Hence, the Estimate amount of money that Tara expects to pay is $250
3 0
3 years ago
If there are two identical companies, one financed 100% equity and the other 50% equity and 50% debt, which would be worth more
Umnica [9.8K]
The one with 100% equity?
5 0
4 years ago
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