Complete Question:
BenchMark, Inc., just paid a dividend of $3.45 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 13 percent on the stock for the first three years, a return of 11 percent for the next three years, and then a return of 9 percent thereafter. What is the current share price for the stock.
Answer:
BenchMark, Inc.
The current share price for the stock is:
$43.13
Explanation:
a) Data and Calculations:
Dividend per share = $3.45
Growth rate = 5%
Investors' required rate of return = 13%
Stock value = Dividend per share / (Required Rate of Return – Dividend Growth Rate)
= $3.45/(0.13 - 0.05)
= $43.13
b) We can calculate BenchMark's current share price, by dividing the dividend per share by the investors' required rate of return after subtracting the growth rate from the required rate of return.
Yes it can be applied.
If an investor is pessimistic that a certain risk that they fear will occur, they avoid investing in the fields prone to the risk.
For example, if an investor is offered an opportunity in the oil and flammable fuels and the persons dreads fire, that person declines the offer no matter how viable it is.
Answer:
14.06%
Explanation:
Assume their is a cash out flow today of $100000, and next four year annual cash inflow of 10000 and 120000 at the end of year 4.
We can use IRR formula to find the interest rate.
year cashflow
0 -100000
1 10000
2 10000
3 10000
4 130000
IRR 14.06%
The calculation has been done on excel sheet
Answer:
The correct answer is All of the options are true.
Explanation:
Proforma financial statements are projected statements. Generally, the data is forecast one year in advance, for example, in a transformation company the proforma status obtained based on the master budget is very complete, all projections are seen starting with the sales forecast and from this They make the other projections.
The Proforma Financial Statements are states that contain, in whole or in part, one or more assumptions or hypotheses in order to show what the financial situation or the results of the operations would be if they occurred.
Answer:
d) Quantify potential credit losses
Explanation:
Credit risk is the possibility of a loss happening because of a borrower's failure to payback a loan or meet up with contractual obligations. The overaching purpose of credit risk analysis is the quantification of the level of credit risk that the borrower poses to the lender. The purpose of credit analysis is to determine if borrowers are credit worthy by quantifying the risk of loss that the lender may experience.
Therefore option D is the answer.
