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Yanka [14]
3 years ago
7

Dunkin' Brands just paid an annual dividend of $1.10 a share. The firm expects to increase this dividend by 8 percent per year t

he following three years and then decrease the dividend growth to 2 percent annually thereafter. Which one of the following is the correct computation of the dividend for year 7? A. (S1.10) (1.08 x 3) (1.02 4) B. (S1.10) (1.08 3) (1.02 x 3) C. (S1. 10) (1.08) (1.02) D. (SI.10) (1.08) (102) E. (S1.10) (1.08) (1.02)
Business
1 answer:
Tema [17]3 years ago
7 0

Answer:

Dividend in year 7 will be calculated as follows:

D3 = Do(1+g)n = 1.10(1+0.08)3

D7= Do(1+g)n(1+g)n = 1.10(1.08)3(1+0.02)4 = $1.4999

Explanation:

In the first instance, we need to calculate dividend in 3 year's time based on current dividend paid at 8% growth rate. Thereafter, we also need to calculate dividend from from year 4 to year 7(4 years) based on the new growth rate of 2%. The combination of these growth regimes gives the dividend in year 7.

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Go to the stock market holders, or look it up online

Hope this helps!
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2 years ago
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healthcare, paid time off, disability insurance, and matching contributions to a retirement account are all types of
Leto [7]

Answer:

people

Explanation:

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3 0
3 years ago
Details of invoices for purchases of merchandise are as follows: Merchandise Freight Terms Returns and Allowances(a) $2,800 $45
Lostsunrise [7]

Answer:

A.$2,619

B.$6,800

C.$839

D.$495

Explanation:

Calculation to Determine the amount to be paid in full settlement of each of the invoices,

a) (2,800-200)*99%+45

=2,600*99%+45

=2,574+45

= $2,619

b) (7,600-800)

= $6,800

c)$1,400 – $600 – $16 + $55

=$784+$55

= $839

d)$500 –$5 = $495

6 0
3 years ago
Your uncle is about to retire, and he wants to buy an annuity that will provide him with $75,000 of income a year for 20 years,
Nataly_w [17]

Answer:

The annuity will cost him $963,212.95.-

Explanation:

Giving the following information:

Cash flow= $75,000

Interest rate= 0.0525

n= 20

First, we need to calculate the final value. We will use the following formula:

FV= {A*[(1+i)^n-1]}/i + {[A*(1+i)^n]-A}

A= annual cash flow

FV= {75,000*[(1.0525^20) - 1]/0.0525} + {[75,000*(1.0525^20)] - 75,000}

FV= 2,546,491.88 + 133,690.82= $2,680,182.70

Now, the present value:

PV= FV/(1+i)^n

PV= 2,680,182.70/(1.0525^20)

PV= $963,212.95

4 0
3 years ago
All of the following statements are true regarding earnings per common share (EPS) except:
SVEN [57.7K]

Answer:

d) EPS cannot be calculated if a company has no preferred stock.

Explanation:

The above statement is untrue about E.P.S because the reason why 'Preferred dividend' (which is dividend on preference shares)  is subtracted from Net Income, before being divided by the 'Average Number of Common Shares Outstanding' is for comparability.

Since the denominator is based on 'common shares' or 'ordinary shares', it makes sense not to include the part of income that has fallen to preferred shares.

As a matter of fact there are a lot of companies that do not have preferred stock and still report Earnings Per Share on their financial statements.

Finally, still on comparability; E.P.S helps to compare the performance of big companies that have preferred stock with small companies that do not have. Hence EPS can be calculated even when there is no preferred stock.

8 0
3 years ago
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