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KatRina [158]
3 years ago
8

Daniel Custom​ Cycles' common stock currently pays no dividends. The company plans to begin paying dividends beginning 3 years f

rom today. The first dividend will be​ $3.00 and dividends will grow at 5 percent per year thereafter. Given a required return of 15​ percent, what would you pay for the stock​ today?
Business
1 answer:
svetoff [14.1K]3 years ago
7 0

Answer:

stoke price in 2 year is $30

current stoke price is $22.68

Explanation:

Given data

dividend in 3 year = $3.00

grow rate = 5% = 0.05

return = 15% = 0.15

to find out

pay for the stock​ today

solution

we know there is no dividends for first 3 year after they need to pay

so first we calculate stoke price in 2 year from this formula i.e.

stoke price = dividend in 3 year /  ( return rate - grow rate )

put these value

stoke price = 3 /  ( 0.15 -  0.05 )

stoke price in 2 year is $30

now we calculate current price for stoke by discounting stoke in 2 year by this formula to 2 year

current stoke price = stoke price in 2 year  / (1 + return rate )²

current stoke price = 30  / (1 +  0.15 )²

current stoke price is $22.68

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Cash flows from activities include both inflows and outflows of cash from the external funding of a business. True or false?.
user100 [1]

True.

Cash flows from activities include both inflows and outflows of cash from the external funding of a business.

<h3>Cash Flow from Financing Activities: What is it? </h3>
  • The net amount of financing a business generates during a specific time period is called cash flow from financing activities.
  • The issuing and repayment of equities, the payment of dividends, the issuance and repayment of debt, and capital lease obligations are all examples of financial activity.

<h3>What Are the Different Types of Cash Flows? </h3>
  • Money coming into a business is known as cash inflow, and it may come through sales, investments, or financing.
  • The reverse of a cash outflow is a cash inflow, which is money entering a business.

<h3>What three different forms of cash flows are there?</h3>

To assess the liquidity and solvency of the company, organizations should monitor and analyze three different types of cash flow:

  • cash flow from operating operations
  • cash flow from investing activities
  • cash flow from financing activities.

The cash flow statement of a corporation includes all three.

  • Items like dividends and interest payments are excluded.
  • stock, debt, or alternative sources of funding.
  • Asset depreciation for capital goods

To learn more about financing activities visit:

brainly.com/question/16377227

#SPJ4

3 0
2 years ago
A customer touch point for abacus airlines would be an item such as ________. a mechanic's ability to service the airplanes the
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<span>A customer touch point for abacus airlines would be an item such as reservation desk. 

A customer touch point is a point in the process where a consumer and the organization exchange information, finish providing the service, or handle transactions. At the reservation desk, the customer and the business are focusing on the business and service transactions.  </span>
3 0
3 years ago
Revenues and gains included in arriving at net income that do not provide cash.
zhenek [66]

Answer:

Non-cash revenues.

Explanation:

Non-cash revenues can be defined as revenues and gains included in arriving at net income that do not provide cash.

Basically, on the statement of cash-flow, non-cash revenues are considered not to be a real cash-flow because they don't add to the total inflow of cash.

Some examples of noncash revenues are amortization of premium relating to bonds payable, cash flow from investments that are carried under the equity method, accrued revenues, and gains from disposals of non-current assets.

7 0
3 years ago
A firm has a net profit/pretax profit ratio of .6, a leverage ratio of 1.5, a pretax profit/EBIT of .7, an asset turnover ratio
Alenkinab [10]

Answer:

The answer is A.15.12%.

Explanation:

Please find the below for explanation and calculations:

We have EBIT = Pretax profit /0.7 = Net profit / (0.6 x 0.7) = 0.42 x Net Profit

=> Net profit / Sales = Profit margin =  0.42 x EBIT/ Sales = 0.42 x Return-on-sales = 2.52%;

Leverage ratio = Asset/ Equity = 1.5;

Sales / Asset = asset turn over ratio = 4;

Apply the Dupont model we have:

Return on Equity = Leverage ratio x Profit Margin x Leverage ratio = 2.52% x 1.5 x 4 = 15.12%.

Thus, the answer is A. 15.12%.

6 0
4 years ago
You are considering two independent projects. Project A has an initial cost of $125,000 and cash inflows of $46,000, $79,000, an
romanna [79]

Answer :

Choose Project A. Because it has a positive Net Present Value.

Explanation :

Find the Net Present of the two project. Then choose the Project with the highest or positive Net Present Value.

Calculation of NPV of Project A using a Financial Calculator :

Project A:  

($125,000) CFj

$46,000         Cfj

$79,000         Cfj

$51,000         Cfj

i/yr             16.00 %

Shift NPV  $6,038.58

Calculation of NPV of Project B using a Financial Calculator :

Project A:  

($135,000) CFj

$50,000         Cfj

$30,000         Cfj

$100,000       Cfj

i/yr             16.00 %

Shift NPV  -$5,535.90

Conclusion :

Choose Project A. Because it has a positive Net Present Value.

3 0
4 years ago
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