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
Alina [70]
3 years ago
14

Presently, Stock A pays a dividend of $2.00 a share, and you expect the dividend to grow rapidly for the next four years at 20 p

ercent. Thus the dividend payments will be Year Dividend 1 $1.20 2 1.44 3 1.73 4 2.07 After this initial period of super growth, the rate of increase in the dividend should decline to 8 percent. If you want to earn 12 percent on investments in common stock, what is the maximum you should pay for this stock?
Business
1 answer:
Flura [38]3 years ago
3 0

Answer:

In order to find the price of a stock which has different growth rate at different periods, we need to find the price at a time when the growth rate slows down after the initial burst of growth and is stable, in this case its in the 4th period.

Year 4 dividend = 2.07

Growth rate (G)= 8%

Required return (R)= 12%

DDM formula for stock price = D*(1+G)/R-G

2.07*(1+0.08)/0.04

=55.89

The maximum that you should be willing to pay for the stock 4 years from now is $55.89 but in order to find out what the maximum we should pay for the stock now, we need to discount this price 4 years back to the present value using the required return of 12 %

so 55.89/1.12^4=35.52

The maximum that you should be willing to pay for the stock now is $35.52

Explanation:

You might be interested in
Beckingham Sports is an American sporting goods company. Based on $400,000 spent on market research and $600,000 spent on consul
Cerrena [4.2K]

Answer:

The correct answer is E)

Explanation:

Capital budgeting is an accounting method that corporations use to decide which planned acquisitions of fixed assets will be approved and which should be refused.

Some examples of Capital Expenditures include:

  1. Construction of an additional building
  2. Procurement of delivery vehicles
  3. Procurement of new equipment
  4. Rehabilitation of existing equipment

If one of the criteria for classification under Capital Expenditure is that it must be in the plan, then none of the above items mentioned in the question will fly.

Monies have already been expended on the options A, B, and C.

Option D is an offer to purchase an existing asset, not a planned investment. Therefore it also does not qualify.

Hence the correct answer is E.

Cheers!

3 0
2 years ago
Bolster Soda had an accounts receivable turnover ratio of 9.9 this year and 11.0 last year. Castor Soda had a turnover ratio of
Bess [88]

Answer:

This implies Bolster Soda collects receivables more effectively and quickly than Castor Soda in the two years.

Explanation:

The accounts receivable turnover ratio refers to an accounting ratio that is used to show the how effective a firm is in collecting the receivables or money its clients are owing it.

This implies that accounts receivable turnover ratio is used to determine the extent to which a firm ie effectively managing the credit it gives to customers and how quickly the firm collects that that short-term debt.

The formula for calculating the accounts receivable turnover ratio is as follows:

Accounts receivable turnover ratio =  Net credit sales / Average accounts receivable

When the accounts receivable turnover ratio is high, it implies that the company is efficient is collecting debt and a high percentage of its cutomers are paying up their debts.

The account receivable turnover ratios in the question therefore imply Bolster Soda collects receivables more effectively and quickly than Castor Soda in the two years.

3 0
3 years ago
What is<br> the relationship between supply and<br> demand and price ?
valina [46]

The more supply the lower the price

The higher the demand the lower the supply

The higher price the lower the demand

5 0
3 years ago
Read 2 more answers
Google is known for unusual interview questions. Explain what advantages might these have over more traditional questions about
Sonbull [250]

Answer:

1. those advantages could be very dangerous. someone could've hacked the system or anything & they're trying to get your information.

2. eliza should check in with her manager/boss and ask if it's ok for her to wear sandals.. just to be on the safe side.

3. jameela and jonas need to set some standards in their "relationship" because what they have going on can cause both of their jobs.

4. i would make sure that the promotions are fair, and not giving people promotions because i know them or anything, i'm gonna make sure that they've worked hard for it.

5. by telling these people my strengths & my weakness would cause less problems. there could be some things that i like and they don't like and we can make sure to never reach that point, because it's gonna cause a lot of trouble. explaining yourself or telling more about yourself could really help others get you.. that way you don't have to be rude to people when they say something you don't like or do something you don't like.

Explanation:

i hope this helped you!

8 0
2 years ago
To gain assurance that all inventory items in a client's inventory listing schedule are valid, an auditor most likely would trac
andrew-mc [135]

To gain assurance that all inventory items in a client's inventory listing schedule are valid, an auditor most likely would vouch (C) items listed in the inventory listing schedule to inventory tags and the auditor's recorded count sheets.

<h3>What are inventory items?</h3>
  • Inventory item - a discrete product that can be indicated as being in stock.
  • You can track inventory if your company sells stock items.
  • A product purchased for resale that is tracked in Stock and on the Balance Sheet is an inventory item.
  • An inventory list should, in general, include the product's name, SKU number, description, cost, and quantity.
  • Inventory lists assist brands in managing and monitoring stock levels, enabling tighter inventory control and a more streamlined approach to inventory management.
  • An auditor will most likely attest items listed in the inventory listing schedule to inventory tags and the auditor's recorded count sheets to get assurance that all inventory items in a client's inventory listing schedule are valid.

Therefore, to gain assurance that all inventory items in a client's inventory listing schedule are valid, an auditor most likely would vouch (C) items listed in the inventory listing schedule to inventory tags and the auditor's recorded count sheets.

Know more about inventory items here:

brainly.com/question/24868116

#SPJ4

Complete question:

To gain assurance that all inventory items in a client's inventory listing schedule are valid, an auditor most likely would vouch

A. Inventory tags were noted during the auditor's observation of items listed in the inventory listing schedule.

B. Inventory tags were noted during the auditor's observation of items listed in receiving reports and vendors' invoices.

C. Items listed in the inventory listing schedule to inventory tags and the auditor's recorded count sheets.

D. Items listed in receiving reports and vendors' invoices to the inventory listing schedule.

7 0
1 year ago
Other questions:
  • A city mandates that all businesses who sell goods and services to the city must pay at least a living wage to their workers tha
    11·1 answer
  • Information concerning the unexpected resignation of one or more of the registrant's directors would be disclosed on which of th
    8·1 answer
  • Patti Company owns 80% of the common stock of Shannon, Inc. In the current year, Patti reports sales of $10,000,000 and cost of
    9·1 answer
  • Without the government or foreign sector in the income expenditure model consumption equals what?
    14·1 answer
  • The amount the nation's government owes is called the
    9·1 answer
  • Emma is a marketing manager at a multinational corporation. She gets anxious when her job gets stressful, and she tends to get a
    13·2 answers
  • If you are gonna make a product what would it be and why? (true situation)
    7·2 answers
  • Management wants to build a culture where employees keep security in mind. Employees should be able to access information freely
    8·1 answer
  • Assume that the yen/dollar exchange rate quoted in London at 3:00 p.m. is ×120 = $1, and the New York yen/dollar exchange rate a
    10·1 answer
  • hedging, or reducing risk, is the same as adding value or return to the firm. group of answer choices true false
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!