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irinina [24]
3 years ago
7

Assume​ ExxonMobil's price dropped to ​$35 overnight. Given the dividend growth rate of ExxonMobil of 8.00​% and the last annual

dividend of ​$1.70​, what is the implied required rate of return necessary to justify the new lower market price of $ 35​? What is the implied required rate of return necessary to justify the new lower market price of $ 35​?
Business
1 answer:
a_sh-v [17]3 years ago
6 0

Answer:

Re =  13.26%

Explanation:

we can use the dividend growth model:

P₀ = Div₁ / (Re - g)

  • P₀ = $35
  • Div₁ = $1.70 x 1.08 = $1.836
  • g = 8%
  • Re = cost of equity or required rate of return = ?

$35 = $1.836 / (Re - 0.08)

Re - 0.08 = $1.836 / $35 = 0.0526

Re =  0.0526 + 0.08 = 0.1326 = 13.26%

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Answer:

B) intuition

Explanation:

Analyzing the scenario above, it is clear that Phyllis Stintson performed the decision-making process according to her intuition.

It is possible to perceive the use of intuition as the question provides information that he made the decision by drawing unconscious references from several different experiences in the past.

Intuition can be an important skill for leaders, who need to make decisions that are increasingly quick and important for the success of an organization, so it is important that a leader's self-awareness is a valued characteristic, because from self-awareness the leader has greater emotional control over his experiences, his intuition, his knowledge and other essential characteristics which will be useful to base an important decision-making process.

7 0
3 years ago
Consider the following list of accounts: Accounts Payable Cash Prepaid Rent Common Stock Salaries Payable Equipment Supplies Ren
ladessa [460]

Answer:

Four (4)

Explanation:

The normal balances of the listed accounts are as follows.

Accounts Payable: credit balance

Cash: debit balance

Prepaid Rent: debit balance

Common Stock: credit balance

Salaries Payable: credit balance

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Supplies: debit balance

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5 0
3 years ago
Mary is a line cook at a restaurant and unknowingly has a highly contagious disease, "Syfoid." She hasn’t shown any symptoms h
uysha [10]

Answer: b. Possibly, because she was deprived of her liberty without due process.

Explanation:

Mary has a Constitutional right to due process which means that she should get the opportunity to contest her quarantine. This right is enshrined in the 5th Amendment which asserts that the Federal Government may not deprive a person of their freedoms without due process.

The CDC as a Federal Government arm even when acting in the interest of the people, should give Mary the chance to contest her quarantine so that she may at least see for herself that she might indeed be the source of a deadly disease.

3 0
3 years ago
At the stage, the product reaches its highest point of demand and sales
gregori [183]

Answer: Maturity Stage

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At the maturity stage, the product reaches its highest point of demand and sales. The market is getting closer to saturation, so the number of potential new customers is limited, and competition increases. During the saturation and decline stage, sales stop increasing, so profitability is lowered.

5 0
3 years ago
A company has three product lines, one of which reflects the following results: Sales $235000 Variable expenses 135000 Contribut
Zepler [3.9K]

Answer:

If management decides to eliminate this product line, the company’s net income will reduce by $22,000

Explanation:

<em>A product should be shut down if doing so would make the savings in fixed costs associated with the product to exceed the lost contribution. Other wise , the product should remain.</em>

<em>In a shut down decision , the following relevant cash flows should be considered:</em>

  1. <em>Lost contribution from the product to be shut down</em>
  2. <em>Savings in fixed directly attributable to the product under consideration.</em>

                                                                                                           $                                                                                            

Lost contribution from shut down                                        (100,000)

Savings in fixed cost (60% × 130,000)                                 <u>  78,000</u>

Net loss from shut down                                                      <u>  (22,000)</u>

Net loss from shut down = $(22,000)

If management decides to eliminate this product line, the company’s net income will reduce by $22,000

                     

3 0
3 years ago
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