1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
galben [10]
4 years ago
14

Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of $8.50 per share and has announced that it w

ill increase the dividend by $6.50 per share for each of the next four years, and then never pay another dividend. Required: If you require a return of 16 percent on the company’s stock, how much will you pay for a share today
Business
1 answer:
Vadim26 [7]4 years ago
3 0

Answer:

The correct answer is $65.90 (approx.)

Explanation:

According to the scenario, computation of the given data are as follows:

Dividend paid = $8.50

Increase dividend = $6.50 per year

Require return = 16%

We can calculate the current share price by using following method:

=[($8.5 + $6.5) ÷ (1 + 16%)^1] + [($8.5 + $6.5 + $6.5) ÷ ( 1 + 16%)^2] +[($8.5 + $6.5 + $6.5 + $6.5) ÷ (1+16%)^3] + [($8.5 + $6.5+ $6.5 + $6.5 + $6.5) ÷ (1+16%)^4

= $15 ÷ 1.16 + $21.5 ÷ 1.16^2 + 28 ÷ 1.16^3 + 34.5 ÷ 1.16^4

= $65.90 (approx.)

You might be interested in
Red Co. reported cash paid for interest of $55,000 in its statement of cash flows for the current year. Red did not capitalize a
nordsb [41]

Answer:

$63,500

Explanation:

Interest expense paid in cash           $55000  

Less: Adjusted for accrued interest  $13,000

payable

Add: prepaid interest adjusted         <u>$21,500</u>

Interest expense in its current year  <u>$63,500</u>

statement of income

3 0
3 years ago
The bulk of costs related to legal expenses come from: a. Photocopying b. Online research through legal subscription services c.
Setler [38]

Answer:

c. Attorney's and paralegal's time

Explanation:

Attorney's and paralegal's time is worth much more than any papper the case requires to print as they get charged above $200 dollar per hour and all the job put into writting Subpoenas, law-suit meeting with the judge, with the other lawyers, negociating and recording testimony among and other legal activities is billed and makes up for the mayority of the case legal cost

4 0
4 years ago
Gillian is consuming her optimal consumption bundle of peanuts and raisins. The marginal utility associated with the last peanut
olchik [2.2K]

Answer: The price of peanuts realitve to that of raisins must be 2.

Explanation: Mathematically, relative prices are defined as:

Relative price of Good A with respect to Good B = Price of A / Price of B

So: Relative price of peanuts respect to raisins = Price of peanuts / Price of raisins

...

<u>Relative price of peanuts respect to raisins = 4 / 2 = 2.</u>

<u></u>

3 0
3 years ago
What is the term called that is intended to clear the cylinder valve of dust or dirt that might otherwise enter the regulator
Len [333]

The answer is: cracking

Cracking only allowed for cylinder that contain non-dangerous substance. Toxic gas for example, would not be allowed because even a single crack could make the gas to leak and harm everything near it. Annual maintenance is required to ensure that no malfunction exist in the object.

7 0
3 years ago
As of November 29, it appears that Notel will report earnings per share (EPS) of $1.15 for the quarter ended November 30. Which
astra-53 [7]

Answer: D.  The company reissues the treasury stock it holds.

Explanation:

Earnings per share is calculated by dividing the Net Income by the weighted average number of shares that a company has outstanding. If the company reissues treasury stock, this would increase the number of average stock outstanding thereby increasing the denominator of the EPS equation which would have the effect of reducing the Earnings per share.

For instance, if a company had net income of $50 and common equity outstanding of $40, the EPS would be;

= 50/40

= $1.25

If the company reissues treasury stock of $30, the EPS would change to;

= 50/ (40 +30)

= $0.71

8 0
3 years ago
Other questions:
  • Johnny Appleseed and Company ships all of the apples from its orchards in the Pacific Northwest to a single buyer in Japan. The
    10·1 answer
  • Hi, I'm 16 almost 17 next month and I'm getting a job at McDonald's. I am just curious about how much my first check will be if
    5·1 answer
  • Moroni Industries has the following inventory information. July1Beginning Inventory40 units at $120 5Purchases240 units at $112
    12·1 answer
  • Suppose the following selected condensed data are taken from a recent balance sheet of Bob Evans Farms (in millions of dollars).
    6·1 answer
  • Do you think that a price floor such as a minimum wage will result in a surplus of labor and hence unemployment?
    13·1 answer
  • In 2021, it was discovered that Hines 55 had debited expense for the full cost of an asset purchased on January 1, 2018. The cos
    9·1 answer
  • In a spreadsheet, what is a line of data organized vertically, from top to bottom? A. A row B. A column C. A table D. A cell
    5·2 answers
  • Recently there have been several mergers involving Big Four accounting firms. One such merger involved the firms of Arthur Young
    14·1 answer
  • Which best describes a tsunami?
    5·2 answers
  • Holding all other forces constant, if decreasing the price of a good leads to an increase in total revenue, then the demand for
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!