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Softa [21]
3 years ago
13

Poulter Corporation will pay a dividend of $3.25 per share next year. The company pledges to increase its dividend by 5.1 percen

t per year, indefinitely. If you require a return of 11 percent on your investment, how much will you pay for the company’s stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
andriy [413]3 years ago
5 0

Answer:

Price of stock = $55.08

Explanation:

The price of a stock is the present value of the future dividends discounted at the required rate of return.

P = D/(r-g)

<em>P-price of stock today, D- Dividend in year's time, r- required rate of return,</em>

<em>g- growth rate in dividend</em>

Using the following parameters:

P =?, r- 11%, g- 5.1%

P = 3.25/(0.11-0.051)

P = 55.08474576

Price of stock = $55.08

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The PE ratio: Assuming Net Income for the year is $250,000, what is the net cash flows from operating activities given the follo
solmaris [256]

Answer:

Net operating cash flow = $189,250

Explanation:

Particulars                                    Amount$

Net income                                    250,000

Add:depreciation expense           9,500

Add:loss on sale of asset              1,250

Add:increase in salary payable    19,500

Less:increase in prepaid rent       (27,500)

Add:increase in AP                        29,500

Less:increase in inventory            <u>(93,000)</u>

Net operating cash flow              <u>$189,250</u>

4 0
3 years ago
If the market index subsequently rises by 8% and Ford’s stock price rises by 7%, what is the abnormal change in Ford’s stock pri
Margarita [4]

Answer:

-1.9%.

Explanation:

The computation of the abnormal change in the stock price of ford should be given below:

Given that

The return on the market is 8%.

So, the forecast monthly return for Ford is

= 0.10% + (1.1 × 8%)

= 8.9%.

And, the Ford’s actual return was 7%,

So,

the abnormal return be

= 7% - 8.9%

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3 0
3 years ago
If you are planning to carry a large balance on your credit card which of the following credit card features should you look for
bija089 [108]
The correct answer would be a LOW APR. If you are planning to carry a large balance on your credit card the credit card feature that should you look for is with a low APR. Other options for this question include low annual fees, lots of credit card rewards and a <span>large credit limit. Hope this answer helps.</span>
4 0
3 years ago
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Dima020 [189]

Answer:

the interest rate rises.

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Investments increase when the economy is doing well. If real GDP is to increase or consumers are more optimistic, it means the economy is doing well. Firms operate at near capacity if the economic conditions are favorable. In these three situations, investments will increase, not decrease.

4 0
3 years ago
During a recession, median income falls by 15%. if the demand for grapes falls by 12%, grapes are a(n) _____ good with an income
IgorLugansk [536]
<span>Grapes are a(n) "normal good" with an income elasticity of demand of "0.8". A normal good is a good for which an increase in income results in increased demand, while decreased income results in decreased demand. Thus, we know that the first blank is "normal good" by the definition of a normal good becuase median income fell and demand for grapes fell. The X elasticity of demand is given by (%change in Demand)/(%change in X), where x is any economic variable (income in this case). Thus, to find the elasticity, we divide 12% by 15%. 12%/15%=.08.</span>
7 0
3 years ago
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