Answer:
The investors should expect to 9.26% of Return.
Explanation:
The Dividend Discount Model for Constant Growth should be used here.
DDM = Current Price = Dividend of Year 1 / (Required Return - Growth Rate)
Dividend of Year 1 = 1.64 (1.03) = 1.6892.
Re-arrange the above model for Required Return and put values:
Required Return = (1.6892 / 27) + .03 = .0926 OR 9.26%.
Thanks!
Answer:
1. Threat of new entrants to the industry and the power of suppliers are the strategic issues facing craft brewers in 2017. The threat of entry has a great effect on a companies willingness to expand its product base in fear that a new entrant will either mimic or produce a substitute for their product.
2. I would recommend that small breweries need to get out there and get their product in the minds of more customers, use social media to target their audiences and consumers. They should also invest in equipment that will reduce labor costs in the long run. Risk of supply availability can be mitigated by using multiple suppliers or becoming your own suppliers and also selling to other breweries, making another source of income.
Answer:
B. $6,448,519
Explanation:
The computation of the present value of this growing annuity is given below:
PVA = [Cash flow at year 1 ÷ (interest rate - growth rate)] × {1 - [(1 + growth rate) ÷ (1 + interest rate)^number of years}
= [$675,000 ÷ (0.18 - 0.13)] × [1 - (1.13 ÷ 1.18)^15]
= $6,448,519
Hence, the correct option is b.
1,D u answered it 2,B 3,A 4,E 5,C
