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Eddi Din [679]
3 years ago
12

A stock just paid an annual dividend of $0.40 per share. The firm expects to increase the dividend by 20 percent per year for th

e next four years and 3 percent per year thereafter. The discount rate is 11 percent. Which one of these is correct regarding the two-stage growth formula?
Business
1 answer:
Anon25 [30]3 years ago
7 0

Answer:

12.78

Explanation:

Two stage dividend growth model enables us to identify dividend value by incorporating the effect of multiple growth rates. This model assumes that dividend will pass out through 2 stages of growth. In first stage the dividend grows at a constant rate to a specified time then dividend grows at a further rate.

= Do (1 + g) + D1 (1 +g) + D2 (1 +g) + D3 (1 +g) + D3 * (1 +g2) / (r - g2)

0.4 * 1.2 + 0.48 * 1.2 + 0.6 * 1.2 + 0.7 *1.2 + 0.83 * 1.03 / 11 - 3

= 12.78.

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Many small firms seek to establish a particular niche in the market, realizing that they cannot afford to operate on a larger sc
nadya68 [22]

Answer:

<u>fostering competition</u>

Explanation:

By deciding to focus on a particular niche these smaller firms in effect foster competitions among other larger firms.

For example, if in a market for shoes, a small firm A, that is newly established decides to focus only on selling shoes for children after recognizing they cannot match up with an existing larger company B that sells a variety of shoes (both children and adult shoes). At a point in time when a number of small businesses are operating in this manner, the larger companies would recognize and account for their influence on the market.

3 0
2 years ago
Overview of financial planning
VMariaS [17]

Answer:

1. Operating plan.

2. Operating plan.

3. Financial plan.

4. Dividend policy.

5. B and C.

Explanation:

1. Operating plan: provides detailed implementation guidance for a firm's operations, as well as a forecast of the company's expected future free cash flows.

2. Operating plan: provides the inputs necessary for a risk management evaluation using sensitivity analysis, scenario analysis, or simulations.

3. Financial plan: Is based on knowledge of the amount of funds necessary to compensate the firm's shareholders, and the mix of debt and equity capital used to finance the firm.

4. Dividend policy: sets forth specific targets for cash or share distributions to the firm's shareholders.

Capital structure: describes specific targets for the mix of debt and equity used to finance a firm.

Financial planning can be defined as the process of estimating the amount of capital required for the smooth operations of the business and determine how to achieve the firm's set goals and objectives.

Hence, the following statements are true about financial planning;

I. Once a firm's forecasted financial statements are prepared, the firm must determine how much capital it will need to support these plans.

II. Management must monitor operations after implementing a financial plan to detect deviations from the plan and adjust accordingly.

6 0
3 years ago
1. consumer products such a s furniture and appliances are typically distributed using ______ distribution
GaryK [48]
1 is a and 2 is c i think
4 0
3 years ago
Dave mentions that insurance is the defense for managing your money. Why is this true?.
777dan777 [17]

Insurance is a method of defense when it comes to managing your money according to Dave because it prevents you from incurring more debt.

<h3>How does insurance defend your money?</h3>

According to Dave Ramsey, a defense method in managing your money is one that helps you reduce or avoid debt.

Insurance is therefore a defense for managing your money because it saves you from having to incur debt when you pass through a dangerous situation because the insurance will pay out instead of you having to borrow.

Find out more on the purpose of insurance at brainly.com/question/1941778.

#SPJ1

8 0
2 years ago
For both unearned revenues and prepaid expenses, the cash payment occurs __________ the adjusting entry to record the earning of
alex41 [277]

Answer:

The correct answer that fills the gap is <em>d. before.</em>

Explanation:

Everything that happens in the business must be registered in the accounting system, so that the newspaper and the major contain a complete history of all the commercial operations of the period. If an operation or transaction has not been registered, account balances will not show the correct figure at the end of the accounting period.

The seats with which the accounts are adjusted or updated are called adjustment seats. If the adjustment does not affect an income or expense account, it is not an adjustment entry.

The income can be earned (accrued) before the cash is received from the client, or from accounting for the transaction in the accounting records. These are revenues that have been earned but the corresponding cash has not yet been collected.

The adjustments made to the income accounts are necessary to ensure that all income earned in the period has been recorded in the accounting. In order for the net profit to be expressed correctly in the income statement. There are two types of income adjustment:

  • Cumulative income not collected.
  • Customer advances.
5 0
3 years ago
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