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AfilCa [17]
3 years ago
10

The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 2

0 percent next year and then decreasing the growth rate to a constant 5 percent per year. The company just paid its annual dividend in the amount of $1 per share. What is the current value of a share if the required rate of return is 14 percent?
Business
1 answer:
Alecsey [184]3 years ago
5 0

Answer:

Current value per share is $13.33

Explanation:

The two stage growth model of DDM can be used to calculate the price of the share today. The DDM values a stock based on the present value of the expected future dividends from the stock. The price of this stock under this model can be calculated as follows,

P0 = D0 * (1+g1) / (1+r)  +  [ (D0 * (1+g1) * (1+g2) / (r - g2)) / (1+r) ]

Where,

  • g1 is the initial growth rate which is 20%
  • g2 is the constant growth rate which is 5%
  • r is the required rate of return

P0 = 1 * (1+0.2) / (1+0.14)  +  [ (1 * (1+0.2) * (1+0.05) / (0.14 - 0.05)) / (1+0.14) ]

P0 = $13.33

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Which of the following terms is used to describe the set of policies that relate to government spending, taxation, and borrowing
ch4aika [34]

Answer:

fiscal policies

Explanation:

Fiscal policy refers to the way that the government modifies its total spending and tax rates in order to guide the nation's economy. Fiscal policies work together with monetary policies (regulation of money supply) as a government attempt to influence the economic cycle. When the government implements an expansionary fiscal policy(increase spending and decrease taxes) it will attempt to boost economic growth.

3 0
3 years ago
The variance of a sample of 121 observations equals 441. The standard deviation of the sample equals 1.91. 231. 21. 11.
Cloud [144]

The standard deviation of sample equals: 11

Explanation:

Given:

                                 variance of sample (S^{2}) = 121

                                 no, of observations made = 441

                                         standard deviation = ?

By using the formula:

                          Standard deviation (S) = \sqrt{variance}

                                                                 = \sqrt{S}

                                                                 = \sqrt{121}

                                                                 = 11

Hence the standard deviation is equal to 11.

 

6 0
3 years ago
$1,200 is received at the beginning of year 1, $2,200 is received at the beginning of year 2, and $3,300 is received at the begi
mart [117]

Answer:

Their combined future value will be 8,141.59.

Explanation:

Each deposit is invested at 12%, but for a different amount of years. So, the best thing would be to separate the three, calculate their value at the end of the third year for separated, and then obtain the grand total by adding up the results.

  • First deposit = 1,200. It is invested for three years. The value at the end of year 3 is 1,200*(1.12)^3 = 1,685.91
  • Second deposit = 2,200. It is invested for two years. The value at the end of year 3 is 2,200*(1.12)^2 = 2,759.68
  • Third deposit = 3,300. It is invested for one years. The value at the end of year 3 is 3,300*(1.12) = 3,696.00
  • The sum of the three deposits is 8,141.59.
6 0
3 years ago
Time, energy, and money are examples of:
KengaRu [80]

Answer:

Flexible resources

Explanation:

Flexible resources are defined as those that can be utilised under different categories of resource groups.

They are able to serve multiple functions.

For example money can be used for different activities like production of goods, training of staff, purchase of raw materials, and so on.

Time can be allocated to different endeavours.

Same applies to energy. It can be focused on pursuing various objectives

8 0
3 years ago
When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability,
andriy [413]
Loss in the situation after a time
5 0
3 years ago
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