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masha68 [24]
3 years ago
11

National Warehousing just announced it is increasing its annual dividend to $1.18 next year and establishing a policy whereby th

e dividend will increase by 3.25 percent annually thereafter. How much will one share of this stock be worth 8 years from now if the required rate of return is 9.5 percent?
Business
1 answer:
77julia77 [94]3 years ago
6 0

Answer:

$24.38

Explanation:

The computation of the one share of worth is shown below:

= Eight-year dividend ÷ (Required rate of return - growth rate)

where,  

Next year dividend for eight-year s would be

= Annual dividend × (1 + growth rate)^number of years

= $1.18 × (1 + 3.25%)^8

= $1.18 × 1.291577535

= $1.524061492

The other items rate would remain the same

Now placing these values to the formula above

So, the price would equal to

= $1.524061492  ÷ (9.5% - 3.25%)

= $24.38

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Answer: monitoring operation

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what happens when the price of a good increases holding everything else constant? producer surplus decreases consumer surplus de
Diano4ka-milaya [45]

Consumer surplus drops when a good's price rises while keeping everything else constant.

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1 year ago
During the month of June, Betty Incorporated purchased goods from two suppliers. The sequence of events was as follows: June 3 P
Assoli18 [71]

Answer:

Betty Incorporated

Journal Entries:

June 3:

DR Inventory $7,100

CR Accounts Payable (North Inc.) $7,100

To record the purchase of goods on account with terms 2/10, n/30.

June 5:

DR Accounts Payable (North Inc.) $2,600

CR Inventory $2,600

To record the return of goods on account.

June 6:

DR Inventory $2,500

CR Accounts Payable (South Corp.) $2,500

To record the purchase of goods on account with terms 2/10, n/30.

June 11:

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CR Cash Account $4,410

CR Cash Discount $90

To record the payment of balance owed to North Inc.

June 22:

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CR Cash Account $2,500

To record the payment of balance owed to South Corp.

Explanation:

The trade terms 2/10, n/30 mean that both North Inc. and South Corp. offered 2% cash discounts on amount paid by Betty Incorporated if it could settle its bills within 10 days.  The net allowed credit days are 30 days, after which Betty Incorporated could be charged interest for late payment.  It did not utilize the discount offered by South Corp. as it paid its bills after 16 days instead of within 10 days as stated in the trade terms.

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