Answer:
The most you would pay per share is $18.90 price per share today.
Explanation:
Note: See the attached file for the calculation of present values for year 1 to 3 dividends.
From the attached excel file, we have:
Previous year dividend in year 1 = Dividend just paid = $1.40
Total of PV of dividends from year 1 to year 3 = $4.50720663265306
Year 3 dividend = $1.55542091836735
Therefore, we have:
Year 4 dividend = Year 3 dividend * (100% + Dividend growth rate in year 4) = $1.55542091836735 * (100% + 4%) = $1.61763775510204
Price at year 3 = Year 4 dividend / (Rate of return - Perpetual dividend growth rate) = $1.61763775510204 / (12% - 4%) = $20.2204719387755
PV of price at year 3 = Price at year 3 / (100% + Required return)^Number of years = $20.2204719387755 / (100% + 12%)^3 = $14.3925325274857
Price per share today = Total of PV of dividends from year 1 to year 3 + PV of price at year 3 = $4.50720663265306 + $14.3925325274857 = $18.90
Therefore, the most you would pay per share is $18.90 price per share today.
Answer:
The total loan value would be of $261,825
Explanation:
In order to calculate how expensive of a home can Tedd purchase using a 4%, 30 year mortgage we would have to calculate first the amount of annual payments as follows:
amount of annual payments = $48,000*0.25 = $12,000
PMT = 12,000/12 = 1000
FV = 0
rate = 4%/12
N = 30*12
Hence, use FV function in Excel amount after down payment = $209,461.24
this represents 80% of the loan
, so total loan value = $209,461.24/0.8 = $261,825
The total loan value would be of $261,825
Answer:
FRANCE has a comparative advantage in the production of cheese and SWEDEN has a comparative advantage in the production of oil.
- Comparative advantages result form the lowest opportunity costs. In this case, France's opportunity cos tot produce cheese is lower, while Sweden's opportunity cost of producing oil is lower.
France can gain from specialization and trade as long as it receives more than 3 BARRELS of oil for each pound of cheese it exports to Sweden. Similarly, Sweden can gain from trade as long as it receives more than 1/11 POUNDS of cheese for each barrel of oil it exports to France.
Based on your answer to the last question, which of the following terms of trade (that is, price of cheese in terms of oil) would allow both Sweden and France to gain from trade?
- a. 6 barrels of oil per pound of cheese
- c. 4 barrel of oil per pound of cheese
Answer:
Oct 6 Cash 7344 Dr
Interest Revenue 144 Cr
Notes Receivable 7200 Cr
Explanation:
First we calculate the day on which notes receivable is due.
We start from July 9 as being our first day and in July there are 31 days so 31 - 8 = 23
In August there are 31 days.
In September there are 30 days.
So total days till september are 22+31+30 = 84
So the note is due to be received on October 6.
The amount of interest due is 7200 * 0.08 * 90/360 = $144
The entry to be passed on Oct 6 is a debit to cash for the amount of principal and interest (7200+144) and a credit to interest revenue of 144 and notes receivable of 7200
With Nelly's grandparents being on a fixed income, inflation will cause their purchasing power to go down. Since inflation causes prices to raise, they will not be able to purchases things like before. The correct answer is C.
