Answer:
Price of share today = $21.302
Explanation:
<em>The price of a share can be calculated using the dividend valuation model </em>
<em>According to this model the value of share is equal to the sum of the present values of its future cash dividends discounted at the required rate of return</em>.
If dividend is expected to grow at a given rate , the value of a share is calculated using the formula below:
Price=Do (1+g)/(k-g)
Do - dividend in the following year, K- requited rate of return , g- growth rate
S<em>tep 1 : PV of dividend from year 1 to 3</em>
Year PV of Dividend
1 0.25 × 1.1^(-1) = 0.227
2 0.50 × 1.1^(-2) = 0.413
3 1.25 × 1.1^(-3) = 0.939
<em />
<em>Strep 2 : PV of dividend from year 4 to infinity</em>
PV (in year 3 terms) of dividend= 1.25 × 1.05/(0.1-0.05) = 26.25
PV in year 0 terms = 26.25
× 1.1^(-3) = 19.72
Present Value = 0.227 + 0.413
+ 0.939 + 19.72 = 21.302
Price of share today = $21.302
The statement, return on assets is computed as net income divided by total assets, is true.
Return on assets (ROA) is a profitability ratio, which measures that how efficiently a company uses the assets it owns to generate profits. If a company wants increase the return on assets then the company tries to increase the profit margin.
So the return on asset of a company is computed by dividing the net income earned by the company by average total assets employed by the company. Thus, it measures how much percentage of profit the company is generating in respect to its assets.
Hence, the higher the percentage of return on assets, the better it is.
To learn more about return on assets here:
brainly.com/question/14969411
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<span>Put all of these numbers in a line...obviously, don't put ALL of them, but enough so you can see what you're doing.
1 + 2 + 3 + ... + 297,624,985
Now put all these numbers BACKWARDS underneath that.
1 + 2 + 3 + ... + 297,624,985
297,624,985 + 297,624,984 + 297,624,983 + ... + 1
Now add the first series to the second, and you'll see that they add up to:
297,624,986 + 297,624,986 + 297,624,986 + ...297,624,986
Since there were 297,624,985 terms, the total sum here is
297,624,986 * 297,624,985
But since you added it twice, you divide it by two:
148,812,493 * 297,624,985
This is 44,290,315,996,937,605, so...yes, it is MUCH larger.</span>