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zimovet [89]
3 years ago
8

MJ LTD is expected to grow at various rates over the next five years. The company just paid a $1.00 dividend. The company expect

s to grow at 20% for the next two years (effecting D1 and D2), then the company expects to grow at 10% for three additional years (D3, D4, D5) after which the company expects to grow at a constant rate of 5% per year indefinitely. If the required rate of return on MJ's common stock is 12%, then MJ's stock price is closest to
Business
1 answer:
Black_prince [1.1K]3 years ago
5 0

Answer:

$21.859

Explanation:

According to the scenario, computation of the given data are as follow:-

Present Value = D0 × (1 + growth rate)^time ÷ (1 + Required Rate of Return)^time period

1st Year PV = $1 × (1 + 0.20)^1 ÷ (1+ 0.12)^1

                  = 1.20 ÷ 1.12

                 = 1.071

2nd Year PV = $1 × (1 + 0.20)^2 ÷ (1+ 0.12)^2

                   = $1 × (1.44) ÷ 1.254

                  = $1.148

3rd Year PV = $1 × ( 1 + 0.20)^2 × (1 + 0.10) ÷ (1 + 0.12)^3

                    = $1 × (1.44) × (1.10) ÷ 1.405

                     = $1.127

4th Year PV = $1 × ( 1 + 0.20)^2 × (1 + 0.10)^2 ÷ ( 1 +0.12)^4

                    = $1 × (1.44) × (1.21) ÷ 1.574

                     = $1.107

5th Year PV = $1 × (1 + 0.20)^2 × ( 1 +0.10)^3 ÷ (1 + 0.12)^5

                     = $1 × (1.44) × (1.331) ÷ 1.762

                     = $1.088

6th Year PV = $1 × (1 + 0.20)^2 × (1 + .10)^3 × (1.05) ÷ [(0.12 - 0.05) × (1+.12)^5]

= $1 × (1.44) × (1.331) × (1.05) ÷ (0.07) ×  (1.762)

= $2.012 ÷ 0.1233

= $16.318

Now

Share’s Current Value is

= $1.071 + $1.148 + $1.127 + $1.107 + $1.088 + $16.318

= $21.859

We simply applied the above formula

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Inventory is held with the intention of selling. It is classified as current assets. Income realized from the sale of inventory is revenue to the business.

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Answer:

Explanation:

Run A Duration B Duration C Duration 1 51 48 17 2 60 48 19 3 30 39 19 4 31 48 22 5 30 31 14 6 41 16 17 7 44 12 6 8 44 12 10 9 45 43 9 10 60 41 10 Based on the simulated numbers given above, what is the average completion time of the whole project?

Since B is the predecessor of C.

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1       51            48                        17             48 + 17 = 65

2      60          48                        19             48 + 19 = 67  

4      31           48                       22              48 + 22 = 70

5      30         31                         14              31 + 14 = 45

6      41           16                       17                 41

7     44            12                       6                 44

8     44            12                      10                44

9     45           43                     9              43 + 9 = 52

10     60          41                     10                60

                                                                <u> Total = 546</u>

Total Project completion time in 10 Stimulations = 546

Average project Completion time = 546/10 = 54.6

Therefore, average Project completion time is between 53 and 56 days.

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