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Westkost [7]
3 years ago
14

Auto Transmissions is expected to pay annual dividends of $1.90 and $2.10 over the next two years, respectively. After that, the

company expects to pay a constant dividend of $2.30 a share. What is the value of this stock at a required return of 15 percent?
Business
1 answer:
kupik [55]3 years ago
8 0

Answer:

$14.83

Explanation:

D1 = 1.90

D2 = 2.10

D3 (onwards)  = 2.30; meaning growth rate g = 0

Find the Present value of each year's dividend at 15% interest rate;

PV(D1) = 1.90/(1.15) = 1.6522

PV(D2) = 2.10/(1.15²) = 1.5879

PV(D3 onwards) = \frac{[\frac{2.30}{0.15-0} ]}{1.15^{2} } = 11.5942

Next, sum up of these present values of these dividends to find the value of the stock;

1.6522 + 1.5879 + 11.5942 = 14.8343

Therefore, the price of the stock is $14.83

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Business behavior determines the ethics of society.We can improve society's moral and ethical behavior by first making a commitm
valkas [14]

Answer: The correct answer is False.

Explanation:

Business behavior will not determine the ethics of society. Businesses can't be responsible to change the moral and ethical behaviors of a single person or an entire world. Only a person can change their own behavior. A society in whole can only be changed by each person acting upon their own free will.

If a business is not ethical, then they need to change the way they work and do business and lead by example.

7 0
3 years ago
How is the market segmented? at what segment should crescent be targeting?
raketka [301]
Markets are segmented as <span>behavioral, demographic, geographic, and psychographic. The crescent should be targeting the geographic segment

Hope this helps :))</span>
6 0
4 years ago
The Reynolds Corporation buys from its suppliers on terms of 3/13, net 35. Reynolds has not been utilizing the discounts offered
grin007 [14]

Answer:

Explanation:

A)

cost of not taking a cash discount = (1+3/(100-3))^(360/(35-13)) -1

cost of not taking a cash discount = 66.5%

B)

Effective rate of interest if the company borrows from the bank = (17/(100-12))

Effective rate of interest if the company borrows from the bank = 19.3%

3 0
3 years ago
Copa Cabana Corporation is considering the purchase of a new machine costing $30,000. The machine would generate net cash inflow
olga_2 [115]

Answer:

C. 20.00 percent

Explanation:

The computation of the accounting rate of return is shown below:

The formula to compute the accounting rate of return is shown below:

= Annual net income ÷ initial investment

where,  

Annual net income is

= Net cash flows - depreciation expense

= $12,000 - $6,000

= $6,000

And, the initial investment is $30,000

So, the accounting rate of return on initial investment is

= $6,000 ÷ $30,000

= 20%

The depreciation expense is

= $30,000 ÷ 5 years

= $6,000

6 0
3 years ago
Investors who put their own money into a startup are known as
konstantin123 [22]

Hi there!

Investors who put their own money into a startup are known as angel investors. Also, they are usually family or friends but don't have to be.

The closest answer to angel investors is C. Angels.

I hope that helps u! :)

3 0
3 years ago
Read 2 more answers
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