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Illusion [34]
3 years ago
13

Bretton, Inc., just paid a dividend of $3.15 on its stock. The growth rate in dividends is expected to be a constant 5 percent p

er year, indefinitely. Investors require a return of 13 percent on the stock for the first three years, a rate of return of 11 percent for the next three years, and then a return of 9 percent thereafter. What is the current share price for the stock?
Business
1 answer:
ArbitrLikvidat [17]3 years ago
6 0

Answer:

$74.58

Explanation:

The price of share of the Bretton Inc in the given question shall be the present value of all the dividends associated with this share in the future years.

Present value of year 1 dividend=3.31(1+13%)^-1=$2.93

(3.15*1.05)

Present value of year 2 dividend=3.48(1+13%)^-2=$2.73

(3.31*1.05)

Present value of year 3 dividend=3.65(1+13%)^-3=$2.53

(3.48*1.05)

Present value of year 4 dividend=3.83(1+11%)^-4=$2.52

(3.65*1.05)

Present value of year 5 dividend=4.02(1+11%)^-5=$2.39

(3.83*1.05)

Present value of year 6 dividend=4.22(1+11%)^-6=$2.26

(4.02*1.05)

Present value of all the cash flows after 6 year=$59.22

[4.22(1+5%)/(9%-5%)]*(1+11%)^-6

Price of share                                                         $74.58                                                

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The balance sheet of the Algonquin Company reported assets of $50,000, liabilities of $22,000 and common stock of $15,000. Based
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Answer:

c) $13,000.

Explanation:

Using the accounting equation;

Assets - liabilities = Owners' equity

Owners' equity is usually made up of the common stock and the retained earnings.

Therefore, given;

Assets = $50,000

Liabilities = $22,000

Owners' equity = $50,000 - $22,000

= $28,000

Owners' equity = Retained earnings + common stock

Retained earnings = $28,000 - $15,000

= $13,000

Amount for retained earnings is $13,000.

8 0
3 years ago
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The correct answer for this is C. Jeb should scan the article to check if the one he's looking for is in there. This way, you can efficiently use your time and lessen your hassle on reading everything what the article has to say. 
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3 years ago
Management at Work While reading the newspaper one day, you come across an article discussing the diversity strategy presented b
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1. Kellogg's is likely to experience Reduced turnover when compared with other companies that do not promote diversity

2. He likely to report about his shares of stock, Since the implementation of the diversity strategy, my shares have increased in value.

Explanation:

Benefits of good diversity management are -

  1. Harmonious working conditions
  2. Better involvement of employees
  3. Improved performance of employees
  4. Improved manufacturing processes
  5. Enhanced product quality
  6. Retained sales (i.e. higher level of employee retention)

Good management of diversity means greater profit and a better brand image.

Turnover is the replacement of an employee with a new hire throughout the realm of human resources. Turnover means a proportion of the employees who leave the company for a certain period of time.

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It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. As a result, ope
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Answer:

D) The supply of the output from the hydroelectric power plants to increase

Explanation:

The externality here is a negative one where the hydroelectric plants has to bear the cost of pollution as the paper mills operates.

Correcting means to make the paper mills pay for the external costs of their production and compensate the power plant for the additional cost that incurred as they have to clean up the water.

As the cost of production reduces, the power plant will be more willing to supply electricity at similar prices, ie. their supply curve will shift to the right. It will intersect with the demand curve of the consumers at a point with higher quantity (and maybe lower price)

In other words, they will supply more electricity.

3 0
3 years ago
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EastWind [94]
The correct answer is A
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