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
Pie
3 years ago
15

Tre-Bien, Inc., is a fast-growing technology company. Management projects rapid growth of 30 percent for the next two years, the

n a growth rate of 17 percent for the following two years. After that, a constant-growth rate of 8 percent is expected. The firm expects to pay its first dividend of $2.45 a year from now. If dividends will grow at the same rate as the firm and the required rate of return on stocks with similar risk is 22 percent, what is the current value of the stock?
Business
1 answer:
nordsb [41]3 years ago
4 0

Answer:

Value = $23.35

Explanation:

First, find dividend per year using the growth rates given;

D1 = 2.45

D2 = 2.45 (1.30) = 3.185

D3 = 3.185 (1.17) = 3.7265

D4 = 3.7265 (1.17) = 4.3600

D5= 4.3600(1.08) = 4.7088

Next, find the PV of each dividend;

PV(D1) = 2.45 / (1.22) = 2.0082

PV(D2) = 3.185 /(1.22²) = 2.1399

PV(D3) = 3.7265/ (1.22³) = 2.0522

PV(D4) = 4.3600/ (1.22^4) = 1.9681

PV(D5) = \frac{\frac{4.7088}{0.22-0.08} }{1.22^{4} } =  15.1825

Next, sum up the present values to find the current value of the stock;

=2.0082+ 2.1399 + 2.0522 + 1.9681 + 15.1825

Value = $23.35

You might be interested in
During June, Briganti Corporation purchased $81,000 of raw materials on credit to add to its raw materials inventory. A total of
-BARSIC- [3]

Answer:

Explanation:

The journal entries are shown below:

1. Raw material inventory A/c Dr $81,000

           To Accounts payable A/c  $81,000

(Being the raw material is purchased on account)

2. Work in process inventory A/c Dr $66,000

   Manufacturing overheads A/c Dr $6,000

              To  Raw material inventory A/c Dr $72,000

(Being the use of the material is recorded)

5 0
3 years ago
Jobs in the skilled labor category require what?
son4ous [18]
Minimum of 2 years word experience. :) 
3 0
3 years ago
Kenneth Corporation expects to incur indirect overhead costs of $166,400 per month and direct manufacturing costs of $22 per uni
Eva8 [605]

Explanation:

The computation is shown below:

1.  For Predetermined overhead rate

Predetermined overhead rate = (Total estimated manufacturing overhead for 4 months) ÷ (Total number of units)

where,

Total estimated direct manufacturing cost is

= $166,400 × 4 months

= $665,600

And, the total number of units is

= 4,700 units + 8,700 units + 4,300 units + 7,900 units

= 25,600 units

So, the predetermined overhead rate is

= $665,600 ÷ 25,600 units

= $26 per unit

2. Now the allocated cost for each month is shown below:

For January

= 4,700 units × $26

= $122,200

For February

= 8,700 units × $26

= $226,200

For March

= 4,300 units × $26

= $111,800

For April

= 7,900 units × $26

= $205,400

c. Now the total cost per unit is

= $22 + $26

= $48 per unit

5 0
3 years ago
Weiss Company purchased two identical inventory items. The first purchase cost $30 and the second cost $32. When the Company sol
zhuklara [117]

Answer:

a) FIFO

Explanation:

FIFO means first in, first out. It is an inventory system where the first purchased inventory is the first to be sold . The cost of goods sold is $30 which is equal to the price of the first purchased inventory . Therefore, the FIFO inventory system was used.

LIFO means last in, first out. It is an inventory system where the last purchased inventory is the first to be sold.

Weighted average is when the weighted price of inventory is used as the cost of goods sold.

I hope my answer helps you.

3 0
3 years ago
You are a professor of economics at a university.​ you've been offered the position of serving as department​ head, which comes
Oxana [17]

Answer:

$4500

Explanation:

We can calculate the total change in benefits by deducting the opportunity cost of spending the hours with your family by the annual salary.

Opportunity cost = $20/hour x 200 Additional hours

Opportunity cost = $4000

Total change in benefit = Annual salary - Opportunity cost

Total change in benefit  = $8500 - $4000

Total change in benefit  = $4500

6 0
3 years ago
Other questions:
  • When a company collects the face value of a​ long-term investment in bonds at​ maturity, ________.
    8·1 answer
  • In a response to public outcry over the Internal Revenue Service’s (IRS) extent and abuse of power, the Federal government has d
    8·1 answer
  • Job WR53 at NW Fab, Inc. required $200 of direct materials and 10 direct labor hours at $15 per hour. Estimated total overhead f
    14·1 answer
  • Assume there is an increase in the number of consumers in the market for a good sold by perfectly competitive firms that are ini
    6·1 answer
  • Political risk is defined as an organization's risk of _____ due to politically based events or actions by host governments.
    11·1 answer
  • Which statement is true about popular culture and stereotypes?
    10·1 answer
  • The following information is from Princeton Company's comparative balance sheets.
    10·1 answer
  • What is a 3-month overnight indexed swap (OIS)?
    14·1 answer
  • Explain the required steps to complete a work sheet by placing the following steps in the correct order. (Put the first step at
    12·1 answer
  • When a pharmaceutical company discovers a new drug, patent law gives it market power by guaranteeing:
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!