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vekshin1
3 years ago
9

NU YU announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $.5

3 a share. The following dividends will be $.58, $.73, and $1.03 a share annually for the following three years, respectively. After that, dividends are projected to increase by 3.6 percent per year. How much are you willing to pay today to buy one share of this stock if your desired rate of return is 10 percent? Multiple Choice $16.67 $17.27 $3.40 $17.20 $13.60
Business
1 answer:
konstantin123 [22]3 years ago
7 0

Answer:

The current stock price is $13.60

Explanation:

D1 = $0.53

D2 = $0.58

D3 = $0.73

D4 = $1.03

Growth rate, g = 3.60%

Required return, r = 10.00%

D5 = D4 * (1 + g)

D5 = $1.03 * 1.036

D5 = $1.06708

P4 = D5 / (r - g)

P4 = $1.06708 / (0.10 - 0.036)

P4 = $16.673125

P0 = $0.53/1.10 + $0.58/1.10^2 + $0.73/1.10^3 + $1.03/1.10^4 + $16.673125/1.10^4

P0 = $13.60

So, current stock price is $13.60

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On April 12, Hong Company agrees to accept a 60-day, 10%, $9,000 note from Indigo Company to extend the due date on an overdue a
emmainna [20.7K]

Answer:

The journal entry to be recorded for the payment of the note on date of maturity is shown below:

Explanation:

The journal entry to be recorded for the payment of the note on date of maturity is as follows:

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Being payment of the note payable is reported on the maturity date

As on the day of the payment, the cash is going out of the business which means assets is decreasing and any decrease in assets is credited. Therefore, the cash account is credited. And the notes payable is paid so the notes payable account is debited and interest expense account will also be debited.

Working Note:

Interest expense = $9,000 × 10%  × 60/ 365

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3 0
3 years ago
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2 years ago
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3 0
1 year ago
Kaplan, Inc. produces flash drives for computers, which it sells for $27 each. The variable cost to make each flash drive is $13
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Answer:

Contribution per unit

= Selling price - Variable cost per unit

 = $27 -$13

= $14

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= Contribution per unit

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= $14

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=  0.518518518

Break-even point in dollars

= $1,400

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= $2,700

               

Explanation:

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4 0
3 years ago
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