1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Snezhnost [94]
3 years ago
9

Wilbert's Clothing Stores just paid a $1.20 annual dividend and increases its dividend by 2.5 percent annually. You would like t

o purchase 100 shares of stock in this firm but realize that you will not have the funds to do so for another three years. If you desire a 10 percent rate of return, how much should you expect to pay for 100 shares when you can afford to buy this stock
Business
2 answers:
Ksju [112]3 years ago
7 0

Answer: $1766

Explanation:

Given the following ;

Present dividend (d) = $1. 20

Annual growth of dividend = 2.5%=0.025

Number of shares = 100

Intended period of purchase = 4

If present dividend(P0) = $1.20

After Year 1:

P1 = $1.20 + (0.025 × $1.20) = $1.23

After Year 2:

P2 = $1.23 + (0.025 x $1.23) = $1.26075

After Year 3:

P3 = $1.26075 + (0.025 × $1.26075) = $1.29226875

After Year 4:

P4 = $1.29226875 + (0.025 + $1.29226875) = $1.32457546875

Price of stock = P4 ÷ (0.1 - 0.025)

Price of stock = $1.32457546875 × 0.075 = $17.66

Stock price × number of shares

$17.66 × 100 =$1766

astraxan [27]3 years ago
5 0

Answer:

For 100 shares, the mount that should be paid = $1766

Explanation:

We have to calculate the price of the stock in the 4th year because the investor cannot afford the stock in another 3 years.

Price of the stock = Do + g / ke - g

Dividend in current year = $1.2

Dividend after 1 year = 1.2 +2.5% (1.2)= 1.23

Dividend after 2 years = 1.23 + 2.5%(1.23) = 1.26075

Dividend after 3 years = 1.26075 + 2.5%(1.26) = 1.29227

Price in 4th year = 1.29227 + 2.5% / (0.10 - 0.025)

                            =1.29227 + 2.5%(1.29227)/0.075

                            = 17.66

Therefore, for 100 shares, the mount that should be paid = 17.66 * 100 = $1766

You might be interested in
Answer answer answer answer answer answer answer ​
Tomtit [17]

Answer:

answer answer answer answer

Explanation:

answer

8 0
2 years ago
Read 2 more answers
9. When paraphrasing, which of the following must a student do:
Scorpion4ik [409]

Answer:

5. They are all neccessary

6 0
3 years ago
Mountain High Ice Cream Company transferred $65,000 of accounts receivable to the Prudential Bank. The transfer was made with re
Liono4ka [1.6K]

Answer:

Dr Cash 56,550

Dr Receivable from factor 5,500

Dr Loss on sale of receivables 6,450

    Cr Accounts receivables 65,000

    Cr Recourse liability 3,500

Explanation:

cash = ($65,000 x 90%) - factoring fees = $58,500 - $1,950 = $56,550

factoring fees = $65,000 x 3% = $1,950

loss on sale of receivables (includes factoring fees) = (accounts receivables + recourse liability) - (cash + receivable from factor) =  ($65,000 + $3,500) - ($56,550 + $5,500) = $68,500 - $62,050 = $6,450

3 0
3 years ago
Dividends received for equity securities in which the investor lacks the ability to participate in the decisions of the investee
erastovalidia [21]

Answer:

False.

Explanation:

When the investor does not have decision- making power in the business, his dividend payment process is not different from any other shareholder.

When profits are declared the company debits Retained Earnings (profits) for the divedend amount, and credited to Dividends Payable.

Dividend Payable is then debitted and Cash will be credited to show money has gone out.

4 0
3 years ago
E-lab (the "e" stands for experience) has project teams perform field research for its clients. project teams at e-lab have desi
Nadya [2.5K]
You may expect for the E-Labs project team to be able to perform stretch goals. A stretch goal is an extra objective you set for your battle in the event that you surpass your underlying subsidizing objective, and is, for the most part, used to fund another particular part of your venture. The extend objective was imparted to the group who was going to play a part with pushing their points of confinement past what was already accomplished. That can't be accomplished by incremental or little upgrades yet require stretching out oneself as far as possible to be realized.
4 0
3 years ago
Other questions:
  • Firms that listen to existing customers and tailor offerings based on this input are far more likely to identify potentially dis
    12·1 answer
  • You borrow $2,500. you are to pay back the loan in 36 monthly payments of $79.50. what true annual interest are you paying to th
    14·2 answers
  • You are caring for radiation victims. What is the most important factor that you should consider to assess a client's chance of
    13·1 answer
  • The discussion of the standards for selection of peanuts that will be used in M&Ms and the placement of the M&M logo on
    14·1 answer
  • 9. On August ​20, 2018​, Macak​, Co. decides to invest excess cash of $ 3 comma 000 by purchasing Buffalo​, Inc. bonds. At​ year
    6·1 answer
  • Closing Entries In the midst of closing procedures, Echo Corporation's accountant became ill and was hospitalized. You have volu
    15·1 answer
  • A shopper infers that a product must be of high quality because the manufacturer has been in business a long time. Which heurist
    12·1 answer
  • Quick Eats is a fast-food restaurant that has recently entered the hospitality industry. Since most of its competitors are pursu
    7·1 answer
  • You own a stock portfolio invested 35 percent in Stock Q, 25 percent in Stock R, 15 percent in Stock S, and 25 percent in Stock
    9·1 answer
  • Why do cooperations issue common stock?
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!