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
siniylev [52]
3 years ago
6

Oriole Corp. is a fast-growing company whose management expects it to grow at a rate of 24 percent over the next two years and t

hen to slow to a growth rate of 18 percent for the following three years. If the last dividend paid by the company was $2.15.
1.What is the dividend for the 1st year?
2.What is the dividend for the 2nd year?
3.What is the dividend for the 3rd year?
4.What is the dividend for the 4th year?
5.What is the dividend for the 5th year?
6.Compute the present value of these dividends if the required rate of return is 14 percent.
Business
1 answer:
Salsk061 [2.6K]3 years ago
5 0

Answer:

1.What is the dividend for the 1st year?

$2.67

2.What is the dividend for the 2nd year?

$3.31

3.What is the dividend for the 3rd year?

$3.90

4.What is the dividend for the 4th year?

$4.60

5.What is the dividend for the 5th year?

$5.43

6.Compute the present value of these dividends if the required rate of return is 14 percent.

1. $2.34

2. $2.54

3. $2.63

4. $2.73

5. $2.82

Explanation:

Last Dividend paid = $2.15

Growth rate:

First two years = 24%

Following three years = 18%

FV of Dividend = PV ( 1 + g )^n

1.

Dividend for the 1st year = $2.15 x ( 1 + 24% )^1 = $2.15 x ( 1 + 0.24 )^1 = $2.15 x ( 1.24 )^1 = $2.67

2.

Dividend for the 2nd year = $2.15 x ( 1 + 24% )^2 = $2.15 x ( 1 + 0.24 )^2 = $2.15 x ( 1.24 )^2 = $3.31

3.

Dividend for the 3rd year = $3.31 x ( 1 + 18% )^1 = $3.31 x ( 1 + 0.18 )^1 = $3.31 x ( 1.18 )^1 = $3.90

4.

Dividend for the 4th year = $3.31 x ( 1 + 18% )^2 = $3.31 x ( 1 + 0.18 )^2 = $3.31 x ( 1.18 )^2 = $4.60

5.

Dividend for the 5th year = $3.31 x ( 1 + 18% )^3 = $3.31 x ( 1 + 0.18 )^3 = $3.31 x ( 1.18 )^3 = $5.43

6.The present value of these dividends

Present value of dividends can be calculated by following formula:

PV  = FV / ( 1 + r )^n

FV = Dividend for the year

r = rate of return = 14%

n = number of years

1.      PV = $2.98 / ( 1 + 0.14 )^1 = $2.98 / ( 1.14 )^1 = $2.98 / 1.14 = $2.34

2.      PV = $3.31 / ( 1 + 0.14 )^2 = $3.31 / ( 1.14 )^2 = $3.31 / 1.2996 = $2.54

3.      PV = $3.90 / ( 1 + 0.14 )^3 = $3.90 / ( 1.14 )^3 = $3.90 / 1.481544 = $2.63

4.      PV = $4.60 / ( 1 + 0.14 )^4 = $4.60 / ( 1.14 )^4 = $4.60 / 1.68896 = $2.73

5.      PV = $5.43 / ( 1 + 0.14 )^5 = $5.43 / ( 1.14 )^5 = $5.43 / 1.925416 = $2.82

You might be interested in
Rowanda could not settle her tax dispute with the IRS at the appeals conference. If she wants to litigate the issue but does not
Ray Of Light [21]

Answer: D) Tax Court

Explanation:

Tax court of United States is court that is made for hearing tax-related issue and problem and then judgment is made on the disputes.According to the question, Rowanda should appeal to U.S. tax court for her tax disputer with IRS so that appropriate decision can be made in legal way.

Other options are incorrect because the United state's court of Appeals, federal claim and district are not the place where tax related disputes are legally handled and heard.Thus, the correct option is option(D).

8 0
3 years ago
On December 29, 2005, BJ Co. sold an equity security investment that had been purchased on January 4, 2004. BJ owned no other ma
sineoko [7]

Answer:

AFS 2004 market price decline exceeded 2005 market price recovery

No No

The security cannot be classified as available-for-sale because the unrealized gains and losses are recognized in the Income Statement. Unrealized gains and losses on available-for-sale securities are recognized in owners' equity, not earnings.

The second part of the question is somewhat ambiguous. The 2004 price decline could exceed or be exceeded by the 2005 price recovery. The loss in the first year is not related in amount and does not constrain the realized gain in the second year.

The way to answer the question is to read the right column heading as implying that the earlier price decline must exceed the later price recovery. With that interpretation, the correct answer is no.

For example, assume a cost of $10 and a market value of $4 at the end of the first year. An unrealized loss of $6 is recognized in earnings. During the second year, the security is sold for $12. A realized gain of $8 is recognized-the increase in the market value from the end of the first year to the sale in the second year. Thus, the market decline in the first year did not exceed the recovery in year two. (It could have exceeded the recovery in year two but there is no requirement that it must.)

Explanation:

3 0
3 years ago
EASY WILL GIVE BRAINLIEST!
Alex787 [66]
Answer: True
A chronological resume lists your work history in order of of date.
4 0
2 years ago
Read 2 more answers
Suppose that the equilibrium price of greeting cards declined at the same time the equilibrium quantity of greeting cards increa
lorasvet [3.4K]

Answer:

The answer is: A) A decrease in the price of paper used to make greeting cards.

Explanation:

In normal market conditions, an increase in the equilibrium quantity of greeting cards means that the quantity demanded and the quantity supplied of greetings cards increased. Usually an increase in the quantity supplied will result in an increase of the price of the good or service. But on this specific case something else made the price of the cards decrease. The only one of the four possible options that can explain an external cause for a decrease in the price of greetings cards, is a decrease in the price of paper used to manufacture them.  

3 0
3 years ago
A company has beginning inventory for the year of $13,000. During the year, the company purchases inventory for $150,000 and end
WARRIOR [948]

Based on the opening and closing inventories as well as the purchases, the company cost of goods is $138,000.

<h3>What are the cost of goods sold?</h3>

This can be found as:

= Opening inventory + purchases - closing inventory

Solving gives:
= 13,000 + 150,000 - 25,000

= $138,000

Find out more on cost of goods sold at brainly.com/question/24561653.

#SPJ1

8 0
1 year ago
Other questions:
  • A computer program is an example of _____.
    7·1 answer
  • Joline works for Bell labs in New Jersey. Joline invents a new technology that stops global warming while she is at work on comp
    10·1 answer
  • ABC Corporation has instituted a mentorship program whereby Rita has been assigned to mentor Sally. During a recent conversation
    13·1 answer
  • ​"We ought to do more for the education of our​ children." Statements using words like ought or should are A. normative statemen
    6·1 answer
  • Now you must decide who should be on the team. Kelly will be on the team as a matter of course, and you must choose three other
    15·1 answer
  • Heather's interest and gains on investments for the current year are as follows:
    9·1 answer
  • A breakdown of the four components of GDP shows that
    12·1 answer
  • The construction industry uses which of the pricing methods
    5·1 answer
  • Shane wants to invest money in a 6% CD account that compounds semiannually. Shane would like the account to have a balance of $1
    15·1 answer
  • Gunes Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the fir
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!