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tankabanditka [31]
3 years ago
11

1) Michael's, Inc., just paid $1.95 to its shareholders as the annual dividend. Simultaneously, the company announced that futur

e dividends will be increasing by 4.3 percent. If you require a rate of return of 8.5 percent, how much are you willing to pay today to purchase one share of the company's stock? 2PTS
Business
1 answer:
Marizza181 [45]3 years ago
5 0

Answer:

Price we are wiling to pay = $46.429

Explanation:

Hi, this can be calculated using the dividend discount model

Stock price we are willing to pay  = D / (r - g) where,

D = Dividend

r = required rate of return of investor

g = growth

So working the formula gives us,

Price = 1.95 / (0.085 - 0.043)

Price = $46.429

This is the price we are willing to pay.

Hope that helps.

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A project will produce cash inflows of $5,400 a year for 3 years with a final cash inflow of $2,400 in Year 4. The project's ini
diamong [38]

Answer:

Net Present Value (NPV) is 506

Explanation:

See document attached.  To get the net present value,  we make a cash flow in excel.  

At moment 0 we have the investment cost , in this case $13,400. From period 1 to period 4, we have different incomes. Then, we calculate the Net cash flow that is the difference between benefits and cost.

To get  net present value,  we use VNA formula.  

=VNA(required rate of return; Net cash flow from moment 1 to moment 4 )+Net cash flow at moment 0

Download xlsx
6 0
3 years ago
Soles is a footwear company which has recently set up its store in Ambrosia. To manufacture its products, Soles incurs a range o
alisha [4.7K]

Answer:

Option C Electricity used to run its factories

Explanation:

The reason is that the direct costs are those that are easily attributable to the unit product and the costs that are not directly attributable to the unit product are indirect cost.

So here the salary paid to workers are directly attributable cost because the time taken to produce one unit in modern industry is fixed and determinable so the wage per unit is also fixed. It means it is a direct cost.

The leather used for a unit product of shoe is also determinable and fixed the product and its costs as well. This means we can easily allocate the cost to the unit shoe so it is also direct cost.

Likewise the cost of machines per unit in modern day industries is also determinable. If the machine life is 100,000 units and its price is $200,000 then the cost attributable to unit product of shoe is $2 per unit.

The electricity cost is not attributable to unit product of shoe as this electricity is used for other operations in the factory and this throws cat among the piegons because it is difficult to find how much a product utilizes electricity because their are number of different product produced in the factory and each utilizes electricity differently. So it is not directly attributable and is an indirect cost.

8 0
4 years ago
Ahmad is a new manager at AJ Homes Company. He has absolutely no experience as a manager nor does he know the technology of his
lana [24]

Answer:

B. neutralizers

Explanation:

Leadership neutralizers: The term "leadership neutralizers" is described as one of the factors that tend to prevent a specific manager from taking a few actions in order to improve or enhance work performances, or to take the actions that the "manager" ought to do to perform irrelevantly.

In the question above, the given statement is an example of neutralizers impacting leadership styles and behaviors.

5 0
3 years ago
Suppose that JAN Corp. will issue a new 10 year AA rated corporate bond with a coupon rate of 7.00%. The bond pays interest semi
k0ka [10]

Answer:

The bond was issued at a premium of $ 155.89

Explanation:

In determining whether the bond was issued at premium or discount,it is important to ascertain the price at which the bond was issued first and foremost.

In arriving the price of he bond, all of the future cash flows of the bond are discounted to present values using the discounting factor 1/(1+r)^N

Find detailed calculation in the attached.

Download xlsx
3 0
3 years ago
When dalemend inc. started manufacturing gaming consoles, it had difficulties with performance growth. over time, the consoles b
Deffense [45]

This would be the maturity and decline stages of the technology cycle.

4 0
3 years ago
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