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liq [111]
3 years ago
6

Stock XYZ has a current dividend of $6.00 . The dividend is expected to grow at 4.00% per year until year 3 and then at 3.00% pe

r year for the rest of time. Based on the riskiness XYZ, its discount rate is 7.00% . With this information, what is the dividend yield from today to year 1?
(A) 7.00%
(B) 3.73%
(C) 4.00%
(D) 4.12%
(E) 3.93%
(F) 3.07%
Business
1 answer:
Juliette [100K]3 years ago
5 0

Answer:

(E) 3.93%

Explanation:

year                     cash flows                         pv @7%           present value

1                              $6.24                              0.934579            $5.83

2                             $6.49                               0.87344              $5.67

3                             $6.75                                0.81630              $5.51

Price at year 3        $173.79                             0.81630             $141.87

                      (6.75*1.03)/(0.07-0.03)            

price today                                                                                   $158.88

Devidend yield = 6.24/158.88

                          = 3.93%

Therefore. The dividend yield from today to year 1 is 3.93%

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Last year, XYZ Corporation incurred the following expenditures in the development of a new plant process:
vladimir1956 [14]

Answer:

$50,400

Explanation:

                                                              Amount

Salary                                                     $250,000

Materials                                                $90,000

Utilities                                                   $20,000

Depreciation                                          <u>$18,000</u>

Research and experimental costs <u>$378,000</u>

Current deduction = $378,000/60 * 8(May-December)

Current deduction = $50,400

8 0
3 years ago
Quarter Real GDP (billions of dollars) Long-Run Trend of Real GDP (billions of dollars) 1 4,000 4,000 2 4,160 4,120 3 4,326 4,24
bekas [8.4K]

Answer:

6%

Explanation:

As per given data

Quarter     Real GDP ($billions)     Long-Run Trend of Real GDP ($billions)

   1                      4,000                                   4,000

   2                     4,160                                    4,120

   3                     4,326                                    4,244

   4                     4,413                                    4,371

   5                     4,501                                    4,502

   6                     4,591                                    4,637

   7                     4,499                                    4,776

   8                     4,409                                    4,919

   9                     4,673                                    5,067

   10                    4,954                                    5,219

   11                     5,252                                    5,376

   12                    5,376                                    5,537

Growth of GDP = (DGP of Current/recent period - GDP of Prior period) / DGP of Prior period

In this question prior period is quarter 10 and current /recent period is quarter 11.

So, formula will be

Growth of GDP = (DGP of quarter 11 - GDP of quarter 10) / GDP of quarter 10

As we need to calculate the real GDP growth the formula will be as follow

Growth of real GDP = (Real DGP of quarter 11 - Real GDP of quarter 10) / Real GDP of quarter 10

Growth of real GDP = ($5,252 billion - $4,954 billion) / $4,954 billion

Growth of real GDP = $298 billion / $4,954 billion

Growth of real GDP = 6.02% = 6%

3 0
4 years ago
MeasuresPenno Corporation recorded service revenues of $200,000 in 2017, of which $170,000 were on credit and $30,000 were for c
Ksenya-84 [330]

Answer:

$155,000

Explanation:

Given that,

Service revenues in 2017 = $200,000

Credit sales for 2017 = $170,000

Company also paid cash for 2017 wages = $25,000

Wages for 2017 not paid yet in cash = $20,000

Therefore,

Net income for 2017:

= Service revenues in 2017 - Cash paid for wages - Wages not paid yet in cash

= $200,000 - $25,000 - $20,000

= $155,000

Hence, the company’s net income for 2017 is $155,000.

4 0
3 years ago
Scenario 22-3: Economy of Centralia Centralia has no trade and no government. GDP = $25 trillion. Consumption Spending = $18 tri
erastovalidia [21]

Answer:

The level of private saving in Centralia is $7 trillion.

Explanation:

The economy of Centralia has no trade and no government.

The level of GDP is given as $25 trillion.  

Consumer spending is $18 trillion.  

The level of private savings, in this case, will be the difference between the GDP or total income and consumption spending.  

Private savings  

= $25 trillion - $18 trillion

= $7 trillion

8 0
3 years ago
Which of the following is not an advantage of the corporate form of business organization?
RoseWind [281]

Answer:

Easy to transfer ownership.

Explanation:

its ownership is easily transferable via the sale of shares of stock.

3 0
3 years ago
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