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
Use Cases have been used in a number of process models listed below, except: A. Unified Process B. Data Flow Process Model C. IB
marta [7]

Answer:B. Data Flow Process Model.

Explanation:Use case is a term in Computer software and systems engineering to describe the actions and steps taken between the role which is also known as an actor and the system,it was first introduced by Ivar Jacobson to the world in the year 1992.

Use case is very important and valuable tool in requirement analysis technique and it has been extensively utilized in modern approaches to software engineering.

4 0
3 years ago
There are two teams of students: team A with 3 sophomores, 8 juniors and 13 seniors; and team B with 5 sophomores, 7 juniors and
wariber [46]

Answer:

sopomores= 0.0397

juniors= 0.1481

seniors= 0.2063

Explanation:

Giving the following information:

There are two teams of students:

Team A with 3 sophomores, 8 juniors, and 13 seniors. Total of 24 students.

Team B with 5 sophomores, 7 juniors, and 6 seniors. Total of 18 students.

First, we need to calculate the probability of selecting any student on each team:

Team A:

sophomores=3/21= 0.1428

juniros= 8/21= 0.3809

senors= 13/21= 0.619

Team B:

sopomores= 5/18= 0.2778

juniors= 7/18= 0.3889

seniors= 6/18= 0.3333

Now, we can calculate the probability of selecting the same type of students:

sopomores= 0.1428*0.2778= 0.0397

juniors= 0.3809*0.3889= 0.1481

seniors= 0.619*0.3333= 0.2063

6 0
3 years ago
Assume a company pays tax at a rate of 15% on its first $50,000 of income. Any income above $50,000 is taxed at 25%. If a compan
Margaret [11]

Answer:

Option C, Its marginal tax rate is 18.33%. is correct

Explanation:

The tax payable on its first $50,000 of income is shown below:

tax payable=$50,000*15%=$7500

The tax payable on the remaining balance of $25,000 is computed thus:

tax payable on the balance of $25,000=$25,000*25%=$6250

Total tax payable=$7,500+$6,250=$ 13,750.00  

Marginal tax rate=tax payable/taxable income=$ 13,750.00/$75,000=18.33%

5 0
3 years ago
Marlon wants to save money over a long period of time. He does not need to have easy access to the money, and he is worried abou
Svetlanka [38]

Answer:

A. Bonds.

Explanation:

I majored in Business

3 0
3 years ago
It is appropriate to use the supply-and-demand model in which of the following​ markets?
NeX [460]

Answer:

The correct answers are letters "A", "B", "C", and "D": beer market; car market; wheat market; market for breakfast cereal.

Explanation:

The supply-and-demand analysis is one of the most basic principles in economics.  In simple terms, it states that when an item is scarce, but many people want it, the price of that item will rise. The theory can be applied to markets of <em>goods and services, labor, capital, </em>and <em>all the factors of production</em>. It could be useful to study the fluctuations of a firm or the overall economy.

4 0
3 years ago
Other questions:
  • Wanda takes $3,000 from her savings account that pays 5 percent interest per year and uses the funds to purchase a computer for
    12·1 answer
  • One of the most explosive areas of growth in recent years has been cellular phone networks
    7·2 answers
  • Anna and ben are up for the same promotion at work. when it comes time to make a decision, the management committee chooses ben
    13·2 answers
  • Advertising expenses are a significant component of the cost of goods sold. Listed below is a frequency distribution showing the
    11·1 answer
  • What is the slope of the line represented by the equation y=-2/3<br>- 5x?​
    10·1 answer
  • According to the least preferred coworker (LPC) scale of Fiedler’s model of leadership styles, if the leader describes the least
    15·1 answer
  • Eight equal-strength players, including Alice and Bob, are randomly split into 4 pairs, and each pair plays a game (i.e. 4 games
    6·1 answer
  • Describe how consumers have influence the success of products in recent years
    11·1 answer
  • Hi uhhhhhhhhhhhhhhhhhhhhhhhhhhhhh wsp
    15·2 answers
  • Kaia, a manager, studied the performances of the various business units of her organization. After making an assessment, Kaia ca
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!