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
Nadusha1986 [10]
3 years ago
8

Brushy Mountain Mining Company’s coal reserves are being depleted, so its sales are falling. Also, environmental costs increase

each year, so its costs are rising. As a result, the company’s earnings and dividends are declining at the constant rate of 4% per year. If D0 = $6 and rs = 14%, what is the estimated value of Brushy Mountain’s stock?
Business
1 answer:
VladimirAG [237]3 years ago
6 0

Answer:

$32

Explanation:

Use dividend discount model (DDM) to calculate the price of the stock;

Price(P0) = D1/(rs - g)

whereby,

P0= Current price or current value of stock

D1 = Next year's expected dividend

rs = required rate of return

g = expected dividend growth rate (which is declining, so -0.04)

D1 = D0(1+g)

D1 = $6(1+-0.04) = $6 * 0.96 = $5.76

P0 = 5.76/(0.14 +0.04)

P0 = 32

Therefore, the value of Brushy Mountain’s stock is $32

You might be interested in
Which statement is strongly a sustainable future to alleviate the risks posed by today's production and consumption patterns?
Crank

Answer: OPTION D

Explanation: Sustainable development means consuming natural resources in such a way that the needs of today gets fulfilled without hindering the needs of future generations .

A. Consuming more capital today will result in more depletion of natural resources that are limited in amount thus there would be no sustainable development.

B. This case study relates to sustainable development which depends on limited natural resources thus society does not have the option to invest it .

C. The case study relates to natural resources which are provided by the nature human resource plays no major role in sustainable development.

D. Only consuming natural resources in an efficient manner would result in sustainable development.

4 0
3 years ago
Unavoidable fixed costs areA.relevant to the decision of whether to discontinue the department.B.irrelevant to the decision of w
larisa86 [58]

Answer:

Irrelevant to the decision of whether to discontinue the product line because they will not differ between alternatives.

Explanation:

Fixed costs can be defined as expenses that remain constant during a particular period of time, these costs does not change with an increase or reduction in the volume of production. Fixed costs tends to remain the same even when the organisation experiences a massive sale of their products in the market. Example of fixed costs include rent, loan.

Unavoidable fixed costs can be described as the costs incurred by a company during the introduction of the product into the market. This type of cost does not have the tendency to fluctuate when the production process is discontinued.

8 0
3 years ago
If I buy options contracts for a year out is that profitable instead of day trading/swing trading? Because day trading or swing
mrs_skeptik [129]

Answer:

Active traders often group themselves into two camps: the day traders and the swing traders. Both seek to profit from short-term stock movements (versus long-term investments), but which trading strategy is the better one? Here are the pros and cons of day trading versus swing trading.

8 0
3 years ago
Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 20
Evgesh-ka [11]

Answer: 2016 CPI is 110

Explanation:

Given the following :

Base year = 2012

Cost of basket in 2012 = $50

Cost of basket in 2014 = $52

Coat of basket in 2016 = $55

The Consumer Price Index (CPI) is calculated using the formula :

CPI = (weighted cost item in current period / weighted cost of item in base period) × 100

Base period / year = 2012

Current period = 2016

Therefore, 2016 CPI equals;

($55 / $50) × 100

= 110

8 0
3 years ago
Jessica filled out her job application and is about to turn it in. In the “Position Applied for” box she wrote question marks, b
ankoles [38]
I think the correct answer from the choices listed above is option B. My suggestion for Jessica would be to ask <span>the manager what positions are available and list a specific position. Hope this answers the question. Have a nice day. </span>
4 0
3 years ago
Read 2 more answers
Other questions:
  • Bonds are considered to offer a guaranteed return, as they must be honored by law, but which is still a potential risk that inve
    8·2 answers
  • In one or two sentences, describe how the first-come, first-served distribution method works.
    10·2 answers
  • Which of these statements best represents the law of demand? when buyers' tastes for a good increase, they purchase more of the
    13·1 answer
  • Burruss Company developed a static budget at the beginning of the company's accounting period based on an expected volume of 8,0
    12·1 answer
  • Zipcar’s goal is to have an available zipcar located within 10–15 minutes of its members. This is an example of what component o
    14·1 answer
  • Darryl, a cash basis taxpayer, gave 1,000 shares of Copper Company common stock to his daughter on September 29, 2020. Copper Co
    7·1 answer
  • One of the disadvantages of the Six Sigma approach compared to the Kaizen approach is that: Select one: a. the lack of ownership
    5·1 answer
  • True or false A contract is a type of government protection?
    7·1 answer
  • Brie has a really busy day. She has several tasks to do and she needs to get them all done by the end of the day. She’s worried
    6·1 answer
  • Assume that you are a freshman and live in your school's dormitory. The agreement you've signed with the school states that you
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!