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
babymother [125]
3 years ago
13

Could I Industries just paid a dividend of $1.35 per share. The dividends are expected to grow at a rate of 19 percent for the n

ext five years and then level off to a growth rate of 7 percent indefinitely. If the required return is 13 percent, what is the value of the stock today?
Business
1 answer:
MaRussiya [10]3 years ago
7 0

Answer:

$38.956

Explanation:

According to dividend valuation model, the value of stock today is the present value of all the dividends that it will receive in future.

Based on the above discussion, the value of stock shall be calculated as follows:

Present value of Year 1 dividend=            $1.42

1.6065(1+13%)^-1

Present value of Year 2 dividend=          $1.496

1.91(1+13%)^-2

Present value of Year 3 dividend=          $1.57

2.27(1+13%)^-3

Present value of Year 4 dividend=         $1.66

2.7013(1+13%)^-4

Present value of Year 5 dividend=        $1.74

3.21(1+13%)^-5

Present value of dividend after Year 5=$31.07

(3.21(1+7%)/(13%-7%))*(1+13%)^-5

Price of share=                                      $38.956

You might be interested in
Carver Packing Company reports total contribution margin of $80,200 an pretax net income of $40,100 for the current month. In th
Helen [10]

Answer:

• Degree of operating leverage = $2

• Expected Percent change in income = 20%

Explanation:

Details provided from the question includes ;

Total contribution margin = $80,200

Pretax net income = $40,100

Expected increase in sales value = 10%

Therefore;

Degree of operating leverage

= Contribution margin ÷ Net operating income

= $80,200 ÷ $40,100

= $2

Percent change income

= Percentage increase in sales × Degree of operating leverage

= 10% × 2

= 20%

8 0
3 years ago
Marc and Michelle are married and earned salaries this year of $69,200 and $13,950 respectively. In addition to their salaries,
Nikitich [7]

Answer:

The answer is below

Explanation:

a)  

Gross income = Marc salary + Michelle salary + corporate bond interest = $69200 + $13950 + $1150 = $84300

AGI deductions = contribution + alimony = $3150 + $2150 = $5300

Adjusted gross income = Gross income - AGI deductions = $84300 - $5300 =$79000

Let us assume married filing jointly = $24000

Itemized deductions  = $7300

Greater of married filing jointly and Itemized deductions = married filing jointly = $24000

personal and dependency exemptions = $4050 per person

Therefore personal and dependency exemptions for Marc, Michelle and their child = 3 * $4050  = $12150

total amount of Marc and Michelle's deductions from AGI = Greater of married filing jointly and Itemized deductions + personal and dependency exemptions = $24000 + $12150 = $36150

b) Adjusted gross income = Gross income - AGI deductions = $84300 - $5300 =$79000

4 0
3 years ago
Which of the following statements is most accurate? Select one: a. In process costing, estimating the degree of completion of un
Angelina_Jolie [31]

Answer: The correct answer is "c. The FIFO method computes equivalent units based only on production activity in the current period, ignoring the percentage of completion in beginning Work in Process inventory.".

Explanation: Process Costing is a special accounting method to identify and accumulate direct costs and prorate indirect costs of the same manufacturing process.

The statement "The FIFO method computes equivalent units based only on production activity in the current period, ignoring the percentage of completion in beginning Work in Process inventory." is the most accurate.

3 0
3 years ago
During the past six months, Ben sold goods that cost $43,500, his
cupoosta [38]

Answer:

for this problem the answer would be A. 3.08

Explanation:

Add the expenses and freight (3,500+1,750)

Subtract that from 43,500 (43,500-5250 which equals 38,250). Divide 38,250 by 12,400.

38,250÷12,400=3.08

6 0
3 years ago
The designated market value:a. is always the middle value of replacement cost, net realizable value, and net realizable value le
eduard

Answer:

a. is always the middle value of replacement cost, net realizable value, and net realizable value less a normal profit margin.

Explanation:

As we know that inventory will be recorded at cost or market value whichever is lower. But in the given case, the replacement cost would be recorded at higher values and lesser values. Higher values represent the Net realizable value whereas the lesser values represent the net realizable value less than the normal profit margin.

And if the replacement cost lies in this range than it represents the designated market value.  

Hence, option a is correct.

4 0
3 years ago
Other questions:
  • 9. Zeta Automotive ordered transmissions from the Alpha Transmission Company on May 7, 1990. The terms of sale were FOB destinat
    15·1 answer
  • Zing Inc. is a large fashion brand that manufactures clothing and shoes. The top managers of Zing have decided to use the profit
    11·1 answer
  • A study of about 1,800 U.S. colleges and universities resulted in the demand equation q = 9,900 − 2p, where q is the enrollment
    9·1 answer
  • Borchardt Corporation has provided the following data concerning last month’s operations. Direct materials $ 29,000 Direct labor
    15·1 answer
  • Hypothetical Country has $120 in currency, $280 in reserves, and $900 in deposits. There are no excess reserves. Use this inform
    10·1 answer
  • The Material Safety Data Sheet provides inventory quantity and availability information that is updated on a continuous basis as
    13·1 answer
  • External agencies and government bodies publish safety ratings for cars to help consumers alleviate _____ risk. multiple choice
    11·1 answer
  • Modern quality management approaches recognize the importance that quality: Group of answer choices Is planned, built, and inspe
    15·1 answer
  • A certain manufacturing process might 5 hours in the best-case scenario, 7 hours in the most likely situation, or 10 hours under
    12·1 answer
  • The security that represents the residual ownership of a firm and has no priority in bankruptcy is called:________
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!