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Roman55 [17]
3 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]3 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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Real and nominal income is calculated respectively at----
SpyIntel [72]

Answer: Constant price and Current price

Explanation:

Real income and nominal income is calculated respectively at the constant price and the current price.

The constant prices has to do with the real values that has taken inflation into consideration. They are typically in real value.

The current prices are the prices of goods and services at a particular point in time. Current prices are typically in nominal value.

Therefore, the answer is option D.

5 0
3 years ago
Utility bills change each monthly, so these are called _____ expenses.
Degger [83]
Answer: C. hope this help!!!!!
8 0
3 years ago
Read 2 more answers
Maggie’s mom agrees to let Maggie buy small gifts for some of her friends. Each gift costs $4. Maggie’s mom gave her a budget of
solmaris [256]

Maggie can buy 3 gifts

Solution:

Total budget $19

Each gift costs $4

Shipping fee $7

a.  Total budget — Shipping fee = $19 - $7 = $12  

Maggie’s got $12 more

Each gift costs $4  

Number of gifts that Maggie can buy = \frac{12}{4}  =3  

b.   Let x represent the number of gifts.  

                      19 = 7 +4x

       Subtract -7 from both sides

             19 - 7= 7 + 4x - 7

            Now Simplify,

                   12 = 4x

         Divide both sides by 4

                   \frac{12}{4} = \frac{4x}{4}

                      x = 3  

5 0
3 years ago
An examination of Hyong Corporation's inventory accounts revealed the following information:
andreyandreev [35.5K]

Answer:

Production= 45,000 units

Explanation:

Giving the following information:

Raw materials, June 1: 46,000 units

Raw materials, June 30: 51,000 units

Purchases of raw materials during June: 185,000 units

<u>First, we need to calculate the raw material used in production:</u>

<u></u>

Direct material used= beginning inventory + purchases - ending inventory

Direct material used= 46,000 + 185,000 - 51,000

Direct material used= 180,000

<u>Now, the production for the period:</u>

Production= 180,000/4

Production= 45,000 units

3 0
3 years ago
Identify which of the following statements is correct as to why accounting is important. Multiple choice question. We live in an
ziro4ka [17]

Answer:

Accounting information identifies, records and communicates information about a business.

Explanation:

The accounting information identified the business records and communicate the business information to the insiders and outsiders also it does not have any effect on everyone except the stakeholders. In addition to this, it is not depend upon the valuation made for the stock market

So as per the given situation, the above statement should be correct

3 0
3 years ago
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