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skad [1K]
4 years ago
14

Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of $5.85 per share and has announced that it w

ill increase the dividend by $10.75 per share for each of the next four years, and then never pay another dividend. If you require a return of 12 percent on the company’s stock, how much will you pay for a share today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share price $
Business
2 answers:
GalinKa [24]4 years ago
6 0

Answer:

The present intrinsic value of the share is 94.79 dollars

Explanation:

We need to discount the future dividends at the required rate of return

\left[\begin{array}{ccc}Year&Cashflow&Discounted\\0&5.85&\\1&16.6&14.82\\2&27.35&21.8\\3&38.1&27.12\\4&48.85&31.05\\TOTAL&&94.79\\\end{array}\right]

Each year is discount according to the lump sum formula

\frac{cashflow}{(1 + rate)^{time} } = PV

being rate 12% --> 0.12

\frac{16.6}{(1 + 0.12)^{1} } = 14.82

\frac{27.35}{(1 + 0.12)^{2} } = 21.8

and so on

Elodia [21]4 years ago
4 0

Answer: $94.79

Explanation:

Given the following ;

Current dividend = $5.85 per share

Yearly increment in dividend = $10.75 per share

Number of years = 4

Time (t) = 1-4

Internal rate of return = 12%

Calculate the present value of share given the above details

Cashflow over four years

Year1 = $5.85 + $10.75 =$16. 60

Year2 = $16.60 + $10.75 = $27.35

Year3 = $27.35 + $10.75 = $38.10

Year 4 = $38.10 + $10.75 = $48.85

Present value (PV) =

Cashflow÷(1+IRR) + cashflow÷(1+IRR)^t + cashflow÷(1+IRR)^t + cashflow÷(1+IRR)^t

Present value (PV) =

Year1÷(1+IRR) + year2÷(1+IRR)^2 + Year3÷(1+IRR)^3 + Year4÷(1+IRR)^4

PV = $16.60/(1.12) + ($27.35)/(1.12)^2+ $38.10/(1.12)^3 + $48.85/(1.12)^4 = $94.79

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D
chubhunter [2.5K]

Answer:

False

Explanation:

The situation above is called the "pitch." This is a <em>process of persuasion </em>whereby people present their ideas to their<u> potential clients or investors.</u> This is done in order to achieve a particular purpose. In the situation above, the ad agency's purpose is<em> to win the potential client's account. </em>In order to become successful in pitching ideas, one has to consider some pointers such as <em>getting to the point fast, using a message map, not using too many slides and the like.</em>

So, this explains the answer.

5 0
3 years ago
You are a newspaper publisher. You are in the middle of a one-year rental contract for your factory that requires you to pay $50
Anettt [7]

Answer and Explanation:

The computation is shown below:

Fixed cost is

= $500,000 + $1,000,000

= $1,500,000

And, the marginal cost is

= $0.25 + $0.10

= $0.35 per paer

Now

as we know that

AFC = FC ÷ Q

Now for At 1,000,000 papers,

AFC is

= 1,500,000 ÷ 1,000,000

= $1.50/mo

At 800,000 , it would be

AFC = 1,500,000 ÷ 800,000

= $1.875/mo

MC = $0.35 per paper  and the same is not changed

Now for break even, the average total cost is

ATC = AFC + AVC

ATC = FC ÷ Q + VC ÷ Q

VC = MC × Q

ATC = FC ÷ Q + MC

ATC = FC ÷ Q + 0.35

At Q = 1,000,000,

ATC = 1.50 + 0.35

ATC = $1.85

At Q = 800,000 , it would be

ATC = 1.875 + 0.35

=  $2.225

As it can be seen that

The AFC changes from 1.50 to 1.875 which shows an increment of 0.375.

The MC remains constant or same  at 0.35 as the printing and delivery costs per paper are remain same

And, The minimum amount that we must charge to break even rises i.e. from 1.85 to 2.225. That is a rise of 0.375

6 0
4 years ago
Black market dealers are often legitimate businesses with questionable and illegal practices. (points : 2) true false
amm1812
 The Black Market is a series of dealers who can get you a product that has been repealed from stores, such as 2006 yellow Tide, which cleaned the products too good, forcing the company to take it off the market because they wanted to continue to sell products that they claim better than the last. The Black Market is illegal and if currently under high investigation by governments all over the world. So, if the Black Market practice itself is illegal and all actions taken while in the Black Market are as well, I think you can finalize your answer. Hope this helped!
6 0
3 years ago
Factory Worker<br> A. Natural Resource<br> B. Human Resource <br> C. Capital Resource
sukhopar [10]

Answer:

B. Human Resource

Explanation:

The functions and responsibilities of a factory worker differ depending on the workplace. A factory Worker may operate machinery and tools, work on a  production line, clean and repair equipment, or work as required.

Factory Workers work in manufacturing or processing facilities, are good with their hands, and execute repetitive duties. Factory workers are hence are a human resource.

5 0
3 years ago
If an organization with a corporate social responsibility (CSR) strategy is faced with heavy losses, it will______.
damaskus [11]

The organization will continue to try to balance profit and social goals.

The primary reasons why companies are in business is to make profit. However, a company must be responsible in terms of performing corporate social responsibility to the community where it operates.

Contributing to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented is what is meant by corporate social responsibility.

However, where an organization is faced with heavy losses, it must continue to balance profit and social goals. When the company makes profit, then salaries will be paid, social goals will be fulfilled.

learn more at : brainly.com/question/22395337

6 0
3 years ago
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