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alexandr1967 [171]
3 years ago
13

Maxwell Communications paid a dividend of $1.35 last year. Over the next 12 months, the dividend is expected to grow at 11 perce

nt, which is the constant growth rate for the firm (g). The new dividend after 12 months will represent D1. The required rate of return (Ke) is 24 percent. Compute the price of the stock (P0). (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
PilotLPTM [1.2K]3 years ago
4 0

Answer:

Current dividend paid (Do) = $1.35

Growth rate (g) = 11% = 0.11

Cost of equity (ke) = 24% = 0.24

Po = Do<u>(1 + g)</u>    

           Ke - g

Po = $1.35<u>(1 + 0.11)</u>

                 0.24 - 0.11

Po = <u>$1.4985</u>

            0.13

Po = $11.53                                                                                                                                                                                                                

Explanation:

The current market price of the stock is a function of current dividend paid, subject to growth rate, divided by the current market price of the stock.

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The Stone Harbor Fund is a closed-end investment company with a portfolio currently worth $430 million. It has liabilities of $8
SashulF [63]

Answer:

5.21%

Explanation:

The Stone Harbor Fund

NAV= Investment in portfolio - liabilities/ Numbers of share outstanding

(430-8)/10

=422/10

=$42.2

Discount will be : $42.2 -40 shares

=$2.2

Hence:

$2.2/$42.2

=5.21%

Therefore the premium or discount as a percent of NAV will be 5.21%

4 0
3 years ago
15) One year ago, you purchased 400 shares of Romy’s Roses stock at a price of $24.15 a share. The stock pays an annual dividend
alukav5142 [94]

Answer:

= $2,748

Explanation:

Number of shares purchased = 400

Price per share (a year ago)= $24.15

Total price paid a year ago = 400*$24.15 = <em>$9,660 </em>

Annual dividend per share = $1.82

Total dividend earned = 400 * $1.82 =<em> </em><em>$728</em>

Price per share (today)= $29.20

Proceeds from sale of shares today = 400*$29.20 = <em>$11,680</em>

Next, find total dollar return;

<em>Total dollar return</em><em> = </em>Total dividend earned + Proceeds from sale of shares today - Total price paid a year ago

= <em>$728+ $11,680 - $9,660 </em>

<em>= $2,748</em>

4 0
3 years ago
Which of the following product costing methods produces the most precise product costing information? Select one: A. Organizatio
Doss [256]

Answer:

The correct answer is letter "B": Activity-based costing.

Explanation:

Activity-Based Costing or ABC is a type of managerial accounting that assigns certain indirect costs to the item that generates the bulk of those costs. In the industrial sector, ABC is mainly used to help measure the true cost of output per unit. Compared to other costing methods, ABC provided more clear information because it considers information about the <em>company's activities, the quantity of those activities and their costs</em> in the production process.

8 0
3 years ago
Which of the following is an example that critics of absorption costing may use to show that its use may generate unwanted manag
dlinn [17]

Answer:

D. All of the above.

Explanation:

Absorption costing is the method in which cost is charged on the basis of the actual expenses and facilities absorbed ion the production.

This basically charges usually more cost, in comparison to activity based costing.

In this manner since cost charged is more, the profit for the company is reduced. Accordingly the managers then prefer to produce as much as they can.

The main focus of management is for production.

Even in case this requires maintenance they put the resources into production rather than maintenance.

Thus, all of the statements are true.

8 0
3 years ago
If Julie has an employee stock option that allows her to purchase 1,000 shares of stock at a strike price of $10.00 and she is c
loris [4]

The amount would she have to pay to exercise the option contract today is: $50,000.

<h3>Exercise option</h3>

Using this formula

Exercise option=(Stock per shares×Strike price)×Percentage vested in stock option

Let plug in the formula

Exercise option=(1,000 shares×$10)×50%

Exercise option=$100,000×50%

Exercise option=$50,000

Therefore the amount would she have to pay to exercise the option contract today is: $50,000.

Learn more about exercise option here:brainly.com/question/25750529

#SPJ4

7 0
2 years ago
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