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swat32
3 years ago
14

Jessica's Pharmacy made two announcements concerning their common stock today. First, the company announced the next annual divi

dend will be $1.48 a share. Secondly, all dividends after that will increase by 2.5 percent annually. What is the maximum amount you should pay to purchase a share of this stock if your goal is to earn a 12 percent rate of return?
Business
1 answer:
Tcecarenko [31]3 years ago
8 0

Answer:

Explanation:

Next year's dividend (D1) = 1.48

Perpetual growth rate (g) =2.5% or 0.025 as a decimal

Rate of return or discount rate = 12% or 0.12 as a decimal

Since the dividends will be growing at a constant rate with no definite time period, it means that it will grow at that rate forever.

Use present value of growing perpetuity formula to calculate the price of this stock;

Price = D1 /(r-g)

Price = 1.48 / (0.12 - 0.025)

= 1.48/ 0.095

= 15.5789

Therefore the maximum amount you should pay is $15.58

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A business' last line of defense against risks that cannot be controlled or avoided by other risk management practices is this t
natima [27]

Answer: A business continuity plan

                           

Explanation: Business continuity planning refers to the procedure involved in creating a risk reduction and recovery scheme for a corporation from possible hazards.

The strategy helps to ensure the protection of management and resources and the ability to operate rapidly in the event of an emergency. The BCP is usually designed in ahead of time and includes insight from relevant parties and staff.

BCPs are an essential part of any undertaking. Threats and disturbances result in revenue shortfall and increased costs, resulting in a decline in productivity. And companies can not rely solely on insurance since it does not cover all the costs and the clients that move to the contest.

5 0
3 years ago
Show Stoppers is a monopoly provider of ticket services for the concerts and sporting events and their current service charge is
makvit [3.9K]

Answer:

9.50 dollars

Explanation:

The marginal revenue is the revenue generated for an additional sale.

In this case the new customer will generate an additional revenue equal to the service change to him. This amount is for 9.50 dollars. So, this is the marginal revenue for an additional sale.

The rest of the option are incorrect.

3 0
3 years ago
Susan threw away in the garbage an old chair that had been in her family for many years by placing it on the curb with the rest
rewona [7]

Answer:

It belongs to Alma because Susan abandoned it and Alma took possession of it

Explanation:

By common law, Alma is a person who has found an abandoned property and she may claim it. To do this, she has to take some definite steps to show her claim. Alma can claim this abandoned piece of chair by taking it into her house, or by placing a sign on it to show that she now owns it.

If Susan was to take this to court, the court would determine the kind of item and where it was found to determine if Alma has a right to it. But since it was found in a dump site she now has the right to it.

5 0
3 years ago
Based on what you have read, what is the opportunity
Crazy boy [7]

Answer:a higher quality item

Explanation:

A higher quality them

5 0
3 years ago
​(Cash management​) As CFO of Portobello Scuba Diving Inc. you are asked to look into the possibility of adopting a lockbox syst
zheka24 [161]

Answer:

Check the answers below

Explanation:

  • The per instrument cost of the bank is $0.25. Assuming uniform cheque value, the 24 million remittances across 10000 cheque will mean per cheque value of 2400. If this amount can be invested at 8% p.a., then daily investment income will be approx = 2400 * 8% /365 = $ 0.526

  • Now for the company to jus about cover the cost of the cheque processing, the time should reduce by (assuming fractional time in days is possible) 0.25/0.526 = 0.48 days

  • Now if the interest that can be earned reduces to 4%, the average daily interest will also reduce to $0.263. At this level, the time required to cover the cost should reduce by 0.95 days

The difference is simply because the opportunity cost in terms of alternate usage of funds has decreased for the company.

8 0
3 years ago
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