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
Ne4ueva [31]
3 years ago
5

Consider four different stocks, all of which have a required return of 14 percent and a most recent dividend of $3.50 per share.

Stocks W, X, and Y are expected to maintain constant growth rates in dividends for the foreseeable future of 10 percent, 0 percent, and –6 percent per year, respectively. Stock Z is a growth stock that will increase its dividend by 20 percent for the next two years and then maintain a constant 12 percent growth rate thereafter. What is the dividend yield for each of these four stocks? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) What is the expected capital gains yield for each of these four stocks? (Leave no cells blank - be certain to enter "0" wherever required. A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Business
1 answer:
nlexa [21]3 years ago
6 0

Answer:

Stock W   3.64%

Stock X  14.00%

Stock Y 21.28%

Stock Z   1.56%

Explanation:

We calculate the horizon value for each one. This will provide us with their price and with that, we solve for dividends yield

Stock W - Horizon Value

 3.50 x 1.10            3.85

-----------------  =    -----------  = 96.25

  0.14 - 0.10           0.04

Dividend yield: 3.50 / 96.25 = 0.036363636 = 3.64%

Stock X: g= 0

3.5 / 0.14 =  25

3.5 / 25 = 0.14

Stock Y g = -0.06

3.50 x (1 - 0.06) / (0.14 - (-0.06)) = 16.45

Dividend yield 3.50 / 16.45 = 0,212765957 = 21.28%

Stock Z

\left[\begin{array}{ccc}#&Dividends&Discounted\\&3.5&\\1&4.2&3.68\\2&5.04&3.88\\2&5.6448&217.17\\&TOTAL&224.73\\\end{array}\right]

First we solve for the next two dividends:

next year 3.50 x (1 + 20%) = 4.2

second year 4.20 x (1 + 20%) = 5.04

Here we solve for the horizon value of the constant grow:

5.04 x 1.12 / (0.14 - 0.12) = 282.24

now, we solve for the Present value of each one and add them together.

Getting a value of $224.73

We now solve for dividend yield: 3.50 / 224.73 = 0,01557 = 1.56%

You might be interested in
Critically analyze the difference and points of convergence between floor inspection and functional inspection
r-ruslan [8.4K]

Answer:

Please refer to the below;

Explanation:

Difference between Floor inspection and Functional inspection.

• Floor inspection is usually conducted in a production environment. It involves checking of materials while processing in the machine by inspectors. Rather than checking the materials in the machine at the beginning of production, floor inspection checks the materials while in process inorder to ensure that the defected ones are quickly detected and expunged. It also ensure that the equipments used in processing are properly functioning.

• Functional inspection is an inspection that checks the overall function of a product rather than what makes up the component parts. For instance the load capacity and speed of a vehicle can be checked for optimal performance whereas individual parts that make up the vehicle are not checked, yet bring out satisfactory performance when combined together. This form of inspection is concerned with verification of final output and does not provide details about different sections instead provides a wider understanding of comfort that emanate from inspecting same item.

Points of Convergence between Floor inspection and Functional inspection.

• The key objective of both floor and functional inspection is quality output having reviewed and examined their expectations.

• Both floor and functional inspection work to prevent defective product from flowing down the successive operations and avoid loss to the company

• Both floor and functional inspection aim at meeting customers requirements, wants and needs.

4 0
3 years ago
Bargain Central Furniture, Inc., completed the following treasury stock transactions:
Genrish500 [490]

Answer:

Bargain Central Furniture, Inc.

R1) Journal entries:

a) Debit Treasury Stock with $1,300

Debit Additional Paid-in Capital with $6,500

Credit Cash Account with $7,800

To record purchase of 1,300 shares of common stock, $1 par at $6 per share.

b) Debit Cash Account with $6,300

Credit Treasury Stock with $700

Credit Additional Paid-in Capital with $5,600

To record resale of 700 shares for $9 per share.

R2) Bargain Central Furniture, Inc.

Balance Sheet as at December 31, 2010:

Treasury Stock $600 ($1,300 - $700)

Explanation:

Treasury Stock is a contra account to the Common Stock.  It represents the shares of common stock repurchased.  Two methods are prevalent in reporting transactions in treasury stock.  They are the the cost method, which reports all treasury stock transactions in the Treasury Stock account.

The other method is the par value method.  This method reports only the par value transactions of treasury stock in the Treasury Stock account.  The above or below par value aspects of each transaction is then taken to the Additional Paid-in Capital account.

8 0
3 years ago
Daniel watched the 95-year-old actor Kirk Douglas present the Oscar for Best Supporting Actress in 2011. Daniel became frustrate
8_murik_8 [283]

Answer:

daniel should have focused on the message and not on the way it was delivered.

Explanation:

If Daniel had focused more on getting the message that was being passed by Kirk Douglas, he would have enjoyed the show more.

But in this case he was more focused on how Kirk Douglas was not accurately forming his words. The more he listened the more frustrated he became.

5 0
3 years ago
In the context of segmentation of customers in database marketing,__________is a variable thatincludes gender, age, income, and
Dahasolnce [82]

Answer:

D) demographic information

Explanation:

Geographical information is a variable that includes where customers live.

Psychographic information is a variable that includes the consumers' beliefs, values and motivations.

I hope my answer helps you

3 0
2 years ago
Shelton Co. purchased a parcel of land six years ago for $874,500. At that time, the firm invested $146,000 in grading the site
Oliga [24]

Answer:

$926,000

Explanation:

For computing the initial cost of the warehouse project, we consider the current value of the land i.e represent the opportunity cost and the land value which is purchased six years ago for $874,500 represent the sunk cost which is not recoverable now. So, this sunk cost is not relevant.

And, the lease cost is also not relevant as the lease period will be ended soon.

All other information which is given is not relevant. Hence, ignored it

3 0
3 years ago
Other questions:
  • Zingerman's deli operates seven retail stores throughout the city. It plans to develop a new marketing plan to extend its number
    10·1 answer
  • What is the name for a client-server model with one server and many clients, such as when an application is used to watch a live
    11·1 answer
  • Brian, Kirk, and Jim established a partnership with equal capital contributions. However, Kirk provided an additional contributi
    8·1 answer
  • Which of the following statements about federal student loans is TRUE
    11·1 answer
  • If a baker notifies you that he will not deliver the bread for your restaurant. You must try to find bread even if it costs more
    10·1 answer
  • Which of the following best addresses the economic question For whom to produce?
    11·1 answer
  • A project has an initial cost of $40,000, expected net cash inflows of $9,000 per year for 9 years, and a cost of capital of 11%
    9·1 answer
  • Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 22 percent for the next three years, with the growth
    6·1 answer
  • 20. The shipment of goods or rendering of services to a foreign buyer, located in a
    9·1 answer
  • Explain how firms that compete in the four different market structures determine profitability.
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!