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AlexFokin [52]
3 years ago
13

Dino Co. is a new education consulting firm that just paid its annual dividend of $1.00 yesterday. Analyst believe that due to a

special one-time boost in revenue, the following year’s dividend (t=1) will be $3.50. Dividends will decline at a 30% rate for 2 years, after which point they will grow at a steady rate of 3% forever. Similar firms in the industry have a 20% cost of capital associated with them.
Required:
1) What is the dollar amount of the dividend at the end of year 3 (t=3), round to the nearest penny?
2) What is the per-share value of the stock, round to the nearest penny?
Using the information as in parts 1) and 2), and the calculated share price from part 2:
3) You are offered the chance to buy shares in Dino Co. for $11.75 per share. Should you purchase shares? Would you answer change if you felt Dino Co. would have a 10% cost of capital? Why/why not?
Business
1 answer:
tensa zangetsu [6.8K]3 years ago
4 0

Answer:

Explanation:

1)

dividend at (t = 1) given = 3.5

dividend at (t = 2) = 3.5 *(1 - 0.3) = 2.45

dividend at (t = 3) = 2.45*(1 - 0.3) = $1.715

so dollar amount of dividend at (t = 3) = $1.715

2)

value of the stock = present value of future dividends discounted at cost of capital(20%)

continuous value = dividend at (t = 3)[1+ growth] / K - g

= 1.715(1+3%) / 0.2 - 0.03

= 10.39

share price = 3.5 / (1.2) + 2.45 / (1.2)^2 + 1.715 / (1.2)^3 + 10.39 / (1.2)^3

= $11.62

3)

worth of the share as per calculation is $11.62 only. $11.75 is over priced so it is not recommended to buy

in case of 10% cost of capital

continuous value = dividend at (t = 3)[1+ growth] / K - g

= 1.715(1+3%) / 0.1 - 0.03

= 25.235

share price = 3.5 / (1.1) + 2.45 / (1.1)^2 + 1.715 / (1.1)^3 + 25.235 / (1.1)^3

= $25.45

since offer price of $11.75 is less than calculated value, we can buy the share.

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Johanna has been asked by the department manager to prepare a SWOT analysis on two of the company's products. In which step of t
Stella [2.4K]

Answer:

The options for this question are the following:

A. current reality assessment

B. establish the mission

C. prepare values statement

D. maintain strategic control

The correct answer is A. current reality assessment .

Explanation:

The current evaluation has been designed to evaluate competencies. In the new trends, two support centers can be found: one, focused on the critical review of education sciences in particular and social sciences in general and the other, more pragmatic, derived from the new challenges introduced by the progress dizzying of science and technology.

The traditional evaluation procedure responds to content-based education. It is based on forms of institutionalized obedience and tends to lead the educational process to the school routine and the use of coercive measures, thus impeding the search for critical and creative thinking.

3 0
3 years ago
A basic finding of labor economics is that workers who have more experience in the labor force are paid more than workers who ha
weqwewe [10]

Answer:

1. A basic finding of labor economics is that workers who have more experience in the labor force are paid more than workers who have less experience (holding constant the amount of formal education). True

2. This might be the case because people with more experience have usually had more on-the-job training. True

3. Some studies have also found that experience at the same job (called job tenure) has an extra positive influence on wages. Job tenure is valuable because people gain <u>job-specific knowledge</u> that is useful to the firm.

Explanation:

A worker with more experience means more on-the-job training, this drastically increases the worker's value of the marginal product of labor.

5 0
3 years ago
Give the meaning and nature of Foreign direct Investmen.​
Inessa [10]

Answer:

foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country. ... However, FDIs are distinguished from portfolio investments in which an investor merely purchases equities of foreign-based companies

6 0
3 years ago
Which of the following statements about aims and objectives is untrue? Select one: a. An aim describes what the learners will be
netineya [11]

Answer:<em> Option (b) and (d) are untrue.</em>

Explanation:

From the given option, the following statement about aims and objectives are untrue<em>:</em><em> An objective describes what the learners will be able to do with the language by the end of the lesson, You could have one overall aim and some secondary aims.</em>

<em>Aim is in regards with what you hope to do, your comprehensive purpose in project. It will gesticulate what/where you aspire to be at the end of the project. An aim is usually wide. It is earnest, but not beyond the bounds of possibility.  </em>

<em>Whereas; </em>

<em>There are  more than one objective, these can be referred to as  the specific steps taken to achieve our aim. </em>

7 0
3 years ago
Your cousin is currently 11 years old. She will be going to college in 7 years. Your aunt and uncle would like to have $ 95 comm
zalisa [80]

Answer:

$72,679.976

Explanation:

The computation of present value is shown below:-

Present value = Future value ÷ (1 + Rate of return)^Number of years

= $95,000 ÷ (1 + 3.9%)^7

= $95,000 ÷ (1 + 0.039)^7

= $95,000 ÷ (1.039)^7

= $95,000 ÷ 1.307100055

= $72,679.97553

or

= $72,679.976

Therefore for computing the present value we simply applied the above formula.

5 0
3 years ago
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