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ruslelena [56]
3 years ago
13

Phoenix Industries has pulled off a miraculous recovery. Four years ago it was near bankruptcy. Today, it announced a $3 per sha

re dividend to be paid a year from now, the first dividend since the crisis. Analysts expect dividends to increase by $1 a year for another 2 years. After the third year (in which dividends are $5 per share) dividend growth is expected to settle down to a more moderate long-term growth rate of 6%. Of the firm’s investors expect to earn a return of 16% on this stock, what must be its price?
Business
1 answer:
mezya [45]3 years ago
7 0

Answer:

$40.78

Explanation:

To calculate the price of Phoenix's stock we can use the following formula:

stock price = dividend / (1 + rⁿ) + PV (dividend / (r - g)

stock price = $3 / 1.16 + $4 / 1.16² + $5 / 1.16³ + PV ($5 / ( 16%- 6%)

stock price = $2.58 + $2.97 + $3,20 + PV ($50)

stock price = $8,75 + (50 / 1.16³) = $8,75 + $32.03 = $40.78

You might be interested in
Income Statement Wayne Corporation had the following revenue and expense account balances (in millions) for a recent year ending
stiv31 [10]

Answer:

                                       Income Statement

Revenue                                                                 $24,698

Expenses

Salaries and employee benefits      $8,815

Purchased Transportation                $1,203

Fuel Expense                                     $3,228

Rental and landing fees                     $1,748

Depreciation Expense                       $925

Maintenance and repairs expense   $1,573

Provision for income taxes                $805

Other expense (revenue) net            <u>$4,995</u>

Total Expenses                                                        <u>$23,292</u>

Net Income                                                               <u>$1,406</u>

5 0
3 years ago
Assume that the relationship between test scores and the student-teacher ratio can be modeled as a linear function with an inter
lianna [129]

Answer:

The correct option is D) reduce test scores by 4.56 for every school district.

Explanation:

Based on the information in the question, the relationship between test scores and the student-teacher ratio can be mathematically written as follows:

x = 698.9 - 2.28y .................... (1)

Where,

x = test scores

y = student-teacher ratio

The a slope of (-2.28) indicates the amount by which x will change whenever there is a change in y.

Therefore, when there is a decrease in the student teacher ratio by 2 (i.e. y = 2), we will have:

Change in x = -2.28 * 2 = -4.56

The negative sign therefore indicate that the test scores will reduce by 4.56 for every school district. Therefore, the correct option is D) reduce test scores by 4.56 for every school district.

5 0
3 years ago
what importance does the stationery and information sources play in the effective and efficient Operation of an organization?​
gavmur [86]

Based on the organizational activities model, the importance of stationery and information sources in the effective and efficient operation of an organization includes "<u>the source of quality and quantity data on the production input</u>."

Some other importance of stationery and information sources in the effective and efficient operation of an organization includes the following:

  • It serves as the place to gather data about the strengths and weaknesses of the firms.
  • It is also the source to gather the information opportunities and threats of the organizations.
  • It is also a source of keeping records of finance, employees, success, and failures of the firms.

Hence, in this case, it is concluded that the stationery and information sources in an organization are vital to its success.

Learn more here: brainly.com/question/25264343

6 0
2 years ago
King Noodles' bonds have a 7.5% coupon rate. Interest is paid quarterly and the bonds mature in 8 years. If the discount rate is
natima [27]

Answer:

The price of King Noodles' bonds is $970.66

Explanation:

Coupon payment = 1000 x 7.5% = $75 per year = 75/4 = 18.75 per quarter

Number of periods = n = 8 years x 4 quarter each year = 32 quarter

Yield to maturity = 8% per year = 8% / 4 = 2% per quarter

Price of bond is the present value of future cash flows, to calculate Price of the bond use following formula:

Price of the Bond = $18.75 x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]

Price of the Bond =$18.75 x [ ( 1 - ( 1 + 2% )^-32 ) / 2% ] + [ $1,000 / ( 1 + 2% )^32 ]

Price of the Bond = $18.75 x [ ( 1 - ( 1.02 )^-32 ) / 0.02 ] + [ $1,000 / ( 1.02 )^32 ]

Price of the Bond = $440.03 + $530.63

Price of the Bond = $970.66

3 0
4 years ago
What are the three most critical components that a marketer needs to examine to segment a market effectively?
Georgia [21]
1. Identifiability (and measurability)
2. Accessibility
3. Responsiveness

1. Identifiability
    - the target market must be identifiable to determine which of the
      consumers belong to the segment. The target market must be well-
      defined and measurable, particularly in terms of population, income, and
      age bracket. 

2. Accessibility
    - this refers to the ease of reaching the identified market segment in terms
      of geography and economy with appropriate market strategies. 

3. Responsiveness
    - the target market should be evaluated if they will respond (i.e. purchase)
      the products and services created for them. There is little point in
      identifying a market, creating a product, and developing marketing
      strategies if the consumers themselves see little value in what is being
      offered to them. Thus, the products and services must meed the
      consumers' or organizations' needs. 
4 0
4 years ago
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