Gamma Corp. is expected to pay the following dividends over the next four years: $5, $12, $18, and $1.80. Afterward, the company
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Answer:
The Multi-step income statement is attached, Please find it
Explanation:
The multi-step income statement is attached with this answer please find it.
Gain On Disposal will appear in the other income section of the multi-step income statement
Cost of goods sold will appear in the cost of goods sold section of the multi-step income statement
Depreciation expense will appear in the operating expense section of the multi-step income statement
Sales returns and allowances will appear in the sales / net sales section of the multi-step income statement
price per share of the company's stock is $53.28
Explanation:
Under dividend growth model a stock is overvalued or undervalued assuming that the firm’s expected dividends grow at a value g forever, which is subtracted from the required rate of return or k.
Therefore, the stable dividend growth model formula calculates the fair value of the stock as P =D1 / ( k – g ).
P= price per share
D1 = current dividend
k = required return
g = growth rate
P= $3.41 ÷ (11 % - 4.6% ) =( 3.41 ÷ 0.064 )= $53.28