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ikadub [295]
3 years ago
13

Hi-Tek is a young start-up company. No dividends will be paid on the stock over the next 15 years, because the firm needs to plo

w back its earnings to fuel growth. The company plans to pay a $6 per share dividend in 16 years and will increase the dividend by 4 percent per year thereafter. What is the current share price if the required return on this stock is 16 percent?
A. $5.62.
B. $8.59.
C. $5.40.
D. $50.00.
Business
1 answer:
Zolol [24]3 years ago
4 0

Answer:

current share price = $5.40

so correct option is C. $5.40

Explanation:

given data

dividends paid = 15 years

pay = $6 per share

increase = 4%

to find out

current share price

solution

we know that Value after year 15 will be = ( D15 × Growth rate) ÷ (required return - growth rate)     ......................1

put here value

Value after year 15 = \frac{6*(1+0.4)}{0.16 - 0.04}

Value after year 15 = $52

so here  current share price will be

current share price  = Future dividends × Present value of discounting factor

current share price = \frac{6}{(1+0.16)^{16}}+\frac{52}{(1+0.16)^{16}}

current share price = $5.40

so correct option is C. $5.40

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Tim, who works for Peachtree Realty, referred a buyer to a broker who works for Pinetop Realty. The referring agent is to receiv
IrinaK [193]

Answer:

$1,312.50

Explanation:

Calculation for How much was the referring agent paid

First step is to find the buyer agent amount by using the buyer's agent percentage to multiply the buyer purchased amount of the home

Using this formula

Buyer agent amount =Buyer's agent percentage× Home purchased amount

Let plug in the formula

Buyer agent amount=1.5%×$350,000

Buyer agent amount=$5,250

The last step is to find How much was the referring agent paid

Using this formula

Amount referring agent paid =Buyer agent amount× Percentage of buyer side commission

Let plug in the formula

Amount referring agent paid=$5,250×25%

Amount referring agent paid=$1,312.50

Therefore the amount that the referring agent paid will be $1,312.50

5 0
3 years ago
All of the following must be disclosed on municipal bond trade confirmation EXCEPT: A "In Whole" call dates B For revenue bonds,
Mashcka [7]

Answer:

The correct answer is D. For general obligation bonds, the source of income backing the issue.

Explanation:

There is no requirement to disclose the source of income that supports a general obligation issue because it must be a taxing power. The MSRB requires that the type of income that supports an income bond issue be disclosed, as well as the name of the corporate guarantor of the industrial income bonds. The dates of the calls "in their entirety" must also be disclosed in the customer confirmations, as they may affect the price of the issuance according to the rules of the MSRB (the MSRB requires that if a bond quoted based on performance is negotiated with a premium, and if it is enforceable "in its entirety" on pre-established dates and prices, then the dollar price must be calculated at the date of the call instead of the expiration date, since it is most likely to be called ).

5 0
3 years ago
Bill owns Jurisprudence Employers, Inc., a legal staffing company and employs George. One day Bill instructed George to falsify
Alenkinab [10]

Answer:

Bill is also equally and somewhere more liable as he is the employer.

Explanation:

Although in records it might seem that George did the falsify act, but for that he required the permission of his employer.

When the fact is clearly stated that George did this on direction of his employer Bill, and that Bill demanded this intentionally in order to present extra profits, he is more liable for this false act.

As George is the employee, he is bound  to follow the directions of his employer. Thus Bill is crucially liable for this act, as he is an important reason for this act.

7 0
3 years ago
Equipment with a cost of $225,000 has an estimated salvage value of $15,000 and an estimated life of 4 years or 10,000 hours. It
elixir [45]

Answer:

The depreciation is $52,500

Explanation:

The formula to compute the depreciation under the straight-line method is shown below:

= \dfrac{(original\ cost - salvage\ value )}{Number\ of\ years}

= \dfrac{(\$225,000 - \$15,000)}{4\years}

= $52,500

Under the straight-line method, the depreciation expense should be the same for the remaining useful life. Life of the equipment or machine should always be expressed in years, not in hours.

So, these usage of hours should be ignored.

4 0
3 years ago
"Experience goods" are those which: a. Have performance attributes that are difficult to ascertain at the moment of purchase b.
jek_recluse [69]

Answer:

a. have performance attributes that are difficult to ascertain at the moment of purchase

Explanation:

In case of an experience good, it is difficult to make predictions regarding its price and quality.

The reputation of a seller and word of mouth are the important things that customers can use to make decisions regarding purchasing of the product.

Experience goods are those which have performance attributes that are difficult to ascertain at the moment of purchase

7 0
3 years ago
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