The price should you be willing to pay for this stock is $24.86
<h3>Zephyr Inc. sells wind based systems for generating electricity. The company pays no dividends, but you estimate the stock will be worth $50 per share 5 years from now and you require a 15% rate of return for stock investments of this type. What price should you be willing to pay for this stock?</h3>
A) $12.50.
B) $24.86.
C) $43.48.
D) $57.50.
Solution:
The price that will be paid for this stock can be calculated as follows:
50= x (15/100^5)
50= x (0.15+1^5)
50= x (1.15^5)
50= 2.0113x
Divide both sides by the coefficient of x
= 50/2.0113
= 24.86
Thus, the price that will be paid for the stock is $24.86
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Answer:
D. $3,500
Explanation:
we must focus on the result of the year and the dividends paid, since these decrease the <u>Retained Earnings</u>
Cash flow has no impact and the insurance of stock is within the result of the year
2019, income was 1200 less dividends allocated
200
<u>Retained Earnings</u>= 1000
2020 result of 500 without dividend distribution
<u>Retained Earnings</u>= 500
2021 result of 2300 and distribution of dividends by 300
<u>Retained Earnings</u>= 2000
<u>Total Retained Earnings</u>= 3500
Answer: being designed for the environment
Explanation: When a product is
Designed for the Environment (DfE) it means taking an approach or steps to reducing the overall human health hazards and environmental impact of a product, process or service, from start to finish.
It involves taking steps to investigating the possible environmental impacts of a product and fine tuning the product design as necessary to reduce any future detrimental mpacts.
For example, if a product and it's by products contains non-renewable resources that are dangerous it can lead to a negative environmental impact.
For example,Velvo Inc., an automobile manufacturing company, takes into consideration , the designs of its products in such a way that they do not cause negative impact to the environment by making sure parts can be easily dismantled after use for recycling and the used plastic parts are sorted and recycled to make new parts. Also ensuring that components are either recycled or rebuilt, while unusable parts are incinerated to create energy thereby adhering to Designing for the Environment.
Answer:
Decimal total dollar denominated return is 0.50
Explanation:
The dollar purchase price of the stock =100/1.4*$1
=71.42857143
*$1
=$71.42857143
today's dollar selling price =120/1.12*$1
=107.1428571
*$1
=$107.1428571
Dollar denominated total return in money terms=$107.1428571
-$71.42857143
=$35.71428571
However the dollar-denominated return in percentage terms is computed the below formula
dollar denominated return %=(today's price-initial price)/initial price
=($107.1428571
-$71.42857143
)/$71.42857143
=0.50 which represents 50%
Answer:
The most reliable capital budgeting technique that should be used when comparing mutually exclusive alternative investments is net present value.
The correct answer is C
Explanation:
Net present value is the difference between present value of inflow and present value of outflow. NPV is superior to other investment appraisal techniques because of its value additivity. Whenever conflict arises between net present value and internal rate of return, the conflict is resolved in the favour of net present value.
