Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Answer:
Unit sales level multiplied by a constant unit contribution margin.
Explanation:
The change in period-to-period operating income when using variable costing can be explained by the change in the Unit sales level multiplied by a constant unit contribution margin.
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The system described above refers to the Fixed Exchange Rate System.
<h3>What is the fixed exchange rate system?</h3>
The fixed exchange rate system is a term that refers to the exchange regime of a monetary unit whose value is adjusted according to the value of another reference currency such as the Dollar or the Euro.
According to the above, the currencies of different countries gain or lose value according to their change with respect to the reference currencies.
This system has become widespread in the world with the aim of facilitating trade and investment between countries with the reference currencies.
Learn more about currency in: brainly.com/question/13684639
Answer:
D. The constant growth model cannot be used for a zero growth stock, where the dividend is expected to remain constant over time.
Explanation:
So, we evaluate each option.
a. We discount the dividends by the required rate of return. So incorrect.
b. The dividend yield is annual dividend per share divided by stick price per share. the 5% is the growth in dividend and not the actual dividend itself. So, incorrect.
c. The constant growth is appropriate for companies whose dividend patterns are stable. Startups have multiple stage growths and this option becomes incorrect as constant growth is not applicable.
d. A zero growth stock is one where dividend remains the same. So when there is no growth in dividend, the constant growth model becomes inapplicable. So, the statement is correct.
So, here we have our correct statement and all others are incorrect.
Answer:
The worth of stock today is $12.17.
Explanation:
A Multi-Period Dividend Discount Model should be used to determine the worth of stock today.
<u>Year-1</u> <u>Year-2</u> <u>Year-3</u> <u>Year-4</u>
Dividends - $.80 $1.10 $1.50
Discount Factor - .7763 .6840 .6026
Present Values - .6210 .7524 .9039
Perpetuity (1.50)*(1 + 4%) = $1.56
Terminal Value = 1.56 / (13.5% - 4%) = $16.4210
PV of Terminal Value = Terminal Value * Discount Factor
⇒ PV of Terminal Value = 16.4210 * (1.135)^(-4) = $9.8950.
Add the Present values of Dividends with the PV of Terminal Value to get the Stock Price of Today.
⇒Stock Price = .6210 + .7524 + .9039 + 9.8950 = $12.17.
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