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morpeh [17]
3 years ago
6

Microsoft presently pays no dividend. You anticipate Microsoft will pay an annual dividend of $0.60 per share two years from tod

ay and you expect dividends to grow by 4% per year thereafter. IF Microsoft's equity cost of capital is 12%, then the value of a share of Microosfoft today is:
Business
2 answers:
Scorpion4ik [409]3 years ago
7 0

Answer:

The value of this stock today should be $6.22

Explanation:

The company will start paying dividends 2 years from today that is at t=2. The dividends received 2 years from today can be denoted as D2. The constant growth model of DDM will be used to calculate the price of this stock at t=2 as the growth rate in dividends is constant forever.

The price at t=2 will then be discounted back to its present value today to calculate the price of this stock today.

The price of this stock at t=2 will be,

P2 = D2 * (1+g) / (r - g)

P2 = 0.6 * (1+0.04)  /  (0.12 - 0.04)

P2 = $7.8

The value of this stock today should be,

P0 = 7.8 / (1+0.12)^2

P0 = $6.218 ROUNDED OFF TO $6.22

LuckyWell [14K]3 years ago
3 0

Answer:

Price of share = $ 0.6696

Explanation:

<em>According to the dividend valuation model , the current price of a stock is the present value of the expected future dividends discounted at the required rate of return</em>

This principle can be applied as follows:

Year 2  0.60× 1.12^(-2) = $0.04783

PV of year of year 3 onward

This will  done in two steps:

Step 1

Calculate the PV of dividend in year 2 terms

= 0.60× 1.04 /(0.12-0.04) = $0.78

Step 2

Re-discount the PV (in year 2) to year 0

0.78 × 1.12 ^(-2) = 0.621811224

Price of share

=0.04783 +0.621811

=$ 0.6696

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Patagonia donates at least 1% of profits to support environmental causes. There products are also produced under safe, fair, leg
Alchen [17]

Answer: corporate social responsibility practice

Explanation:

Corporate social responsibility occurs when organizations contribute to societal goals by supporting practices that are ethically oriented and have a positive effect on the economy.

Since Patagonia donates at least 1% of profits to support environmental causes and is contributing positively to the economy, then Patagonia is practicing corporate social responsibility practices.

6 0
3 years ago
Money is: multiple choice any good that buyers and sellers have a desire to purchase, use, or hold. anything that both buyers an
marysya [2.9K]

Answer:

Money is: any good that buyers and sellers have a desire to purchase, use, or hold. only the printed paper currency and the coins that are produced by the government. anything that both buyers and sellers will accept in exchange for goods and services. the gold and silver behind the currency and the coins that are issued by the government.

Explanation:

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8 0
3 years ago
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At the end of their discussion of the productivity problems in Ron's department, Cole restated Ron's concerns: "In other words,
musickatia [10]

Answer:

B.

Explanation:

Sorry if I'm wrong. good luck

7 0
3 years ago
For insight into a government agency's understanding of the laws it administers, one should consult:
AfilCa [17]

Answer:

The agency's interpretive rules.

Explanation:

An interpretive rule can be defined as a document issued by an agency so as to help expound or clarify existing administrative laws, regulations and statutes in the public domain.

Basically, an interpretive rule is not required to meet the minimum requirements or criteria specified by the Administrative Procedure Act (APA). Also, an interpretive rule is not considered as a force of law because it is not binding on the general public.

Hence, for insight into a government agency's understanding of the laws it administers, one should consult the agency's interpretive rules for an explanation on the law and regulations it promulgated,

4 0
3 years ago
If patricia were to paint her living room alone, it would take 4 hours. her sister naomi could do the job in 5 hours. how long w
Mila [183]

Practicia completes the job in one hour = 1/4

Naoimi completes the job in one hour = 1/5

If Parcticia and Naoimi does it together,let us suppose in x number of hours.

The equation so form is:

(1/4)*x + (1/6)*x = 1 (i.e job finished)

The Least common multiple(LCM) of 4 and 6 = 12

12*(1/4)*x + 12*(1/6)*x = 12*1

Therefore, solving the equation we get,

3x + 2x = 12

5x = 12

x = 12/5

x= 2 2/5 hours or 2.24 hours

Therefore number of hours they took to complete the work is 2 hours and 24 minutes or 2.24 hours.

4 0
3 years ago
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