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Roman55 [17]
4 years ago
15

expecting a period of intense growth and has decided to retain more of its earnings to help finance that growth. As a result, it

is going to reduce its annual dividend by 10% a year for the next three years. After that, it will maintain a constant dividend of $.70 a share. Last month, the company paid $1.80 per share. What is the value of this stock if the required rate of return is 13%
Business
1 answer:
Daniel [21]4 years ago
3 0

Answer:

The price of the stock is $7.216

Explanation:

The price of the stock will be calculate the using the two stage dividend Gordon growth model. In the first stage, the dividend is falling a constant percentage for 3 years. After that the growth rate is zero. Thus the formula for the price of such a stock will be,

P0 = D1 / (1+r)  +  D2 / (1+r)²  +  D3 / (1+r)³ + [D4 / r] / (1+r)^4

P0 = [1.8 * (1-0.1)] / (1+0.13) + [1.8 * (1-0.1)²] / (1+0.13)² + [1.8 * (1-0.1)³] / (1+0.13)³ + (0.7 / 0.13) / (1+0.13)^3

P0 = $7.216

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You want to be able to withdraw $35,000 each year for 15 years. Your account earns 9% interest. a) How much do you need in your
Lina20 [59]

Your interests are activities that you enjoy doing and subjects that you enjoy spending time learning. Are interest. When something interesting, it draws your attention and makes you want to learn more about it: less interesting was discussed.

Interest is the money paid to spend someone else's money. An interesting example is $ 20 in this year's savings account. An example of interest is the $ 2,000 paid on a mortgage this year.

Interest is paid for a lifetime but disappears upon death (especially from the property).

Learn more about interest at

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#SPJ4

4 0
2 years ago
The "Fashion Place" carries a carefully selected and distinctive assortment of traditional women's
In-s [12.5K]

Answer:

specialty-store.

Explanation:

Based on the information provided within the question it seems that "The Fashion Place" is probably a specialty-store. These are stores that focus on selling a very specific category of product. Which is exactly what this store is doing by selling only clothes aimed for upper-class executive women's clothing (specialty).

5 0
3 years ago
Discount Mart borrows $400,000 on July 1 with a short-term loan that has an annual interest rate of 6% payable on the first day
adelina 88 [10]

Answer:

C. $6,000; Increase expenses, increase liabilities

Explanation:

The computation is shown below:

= Borrowed amount × rate of interest × given months ÷ Total months

= $400,000 × 6% × 3 months ÷ 12 months

= $6,000

So this $6,000 represent an increase in liabilities and increase in expenses

hence, the correct option is c.

8 0
3 years ago
Prior to opening her new restaurant, Nia is determining what items to offer on the menu, the anticipated profits and expenses, t
user100 [1]

Answer:

A. business model

Explanation:

Business model -

It refers to the series of activities or information required for starting a new startup or business is referred to as a business model .

The prior information and data is very important ,

The information like finances , trading practice , structure of organisation , infrastructure , strategies , customers etc.

Hence , from the given information of the question ,

The correct option is A. business model .

8 0
3 years ago
Read 2 more answers
At the beginning of July, CD City has a balance in inventory of $2,550. The following transactions occur during the month of Jul
Gemiola [76]

Answer:

Inventory 1450 debit

Accounts Payable  1450 crdit

--to record purchase--  

Inventory 120 debit

Cash  120 credit

--to record payment of freights--  

Accounts Payable 400 debit

Inventory  400 credit

--to record returned goods--

Accounts Payable 1050 debit

Inventory  21 credit

Cash      1029 credit

--to record payment within discount--  

Accounts Receivables 4100 debit

Sales Revenues  4100 credit

--to record sale--  

COGS  2150 debit

Inventory  2150 credit

--to record COGS of the previous sale--    

Cash  4,100

Accounts Receivables  4100

--to record collection--

Explanation:

For the purchase we must adjust teh invoice nominal as we are paying within the discount windows and also, there was returned goods.

Balance of the account payable:

1450  -  400 return = 1050

Then 2% discount: 1,050 x 0.02 = 21

Cash payement: 1,050 - 21 = 1,029

The sale do not have credit terms for discount neither a return thus, we don't have to make any adjustment to the invoice nominal the customer pay that amount.

3 0
3 years ago
Read 2 more answers
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