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max2010maxim [7]
3 years ago
8

Healthy Foods just paid its annual dividend of $1.62 a share. The firm recently announced that all future dividends will be incr

eased by 2.1 percent annually. What is one share of this stock worth to you if you require a rate of return of 15.7 percent? Multiple Choice
$12.95
$11.91
$10.54
$12.16
$13.07
Business
1 answer:
Irina18 [472]3 years ago
4 0

Answer:

Option (d) is correct.

Explanation:

P0 = D1 ÷ (ke - g)

Where,

P0 is the price = ?

Currently dividend paid, D0 = $1.62 a share

ke is the required return = 15.70%

g is the growth rate = 2.10%

D1 is the dividend at end of year:

= D0 × (1 + g)

= $1.62 × (1 + 0.021)

= $1.62 × 1.021

= $1.65402

Therefore,

P0 = 1.65402 ÷ (15.7% - 2.1%)

     = 1.65402 ÷ (13.6%)

     = $12.16

Therefore, the price of one share of this stock is $12.16

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faust18 [17]

Answer:

false cause people they alr on the stock market

6 0
3 years ago
Canyon Buff Corp. is considering the purchase of a new piece of equipment which would cost $11,000. This equipment will have a f
Furkat [3]

Answer:

Tax shield on depreciation = 600

Explanation:

given data

new piece of equipment = $11,000

salvage value = $1,000

marginal tax rate = 30%

average tax rate = 20%

time period = 5 year

to find out

net effect of annual depreciation on the free cash flow

solution

we know here cost of asset and  Salvage value so we get depreciation cost  

depreciation cost is = 11000 - 1000 = 10000  

and

annual depreciation = 2000  

so that Tax shield on depreciation will be

Tax shield on depreciation = 2000 × 30%

Tax shield on depreciation = 600

5 0
3 years ago
Suppose that $ 5 000 is invested at 3.9 % annual interest​ rate, compounded monthly. How much money will be in the account in​ (
BlackZzzverrR [31]

Answer:

(A) $5,131.5

(B) $12,729.5

Explanation:

The interest earned on the value of interest earned before is the compounded interest. Compounding is the reinvestment of the amount earned before and take return over it too.

As per given data

Invested amount = $5,000

Interest rate = 3.9%

Interest is compounded monthly

Monthly rate = 3.9% / 12 = 0.325%

Formula for the accumulated amount of investment

A = P ( 1 + r )^n

Accumulated Money when $5,000 is

(A) Invested for 8 months

A =  $5,000 ( 1 + 0.325% ) ^8

A = $5,131.5

(b) Invested for 24 years or 288 months (24 x 12)

A =  $5,000 ( 1 + 0.325% ) ^288

A = $12,729.5

4 0
3 years ago
Read 2 more answers
In this exhibit (Monopoly Through Collusion), is an illustration of the situation in an industry that consists of two firms faci
Vinil7 [7]

Answer: please refer to the explanation section

Explanation:

Assume we have two accompanies in the market Firm A and Firm B and the Demand curve be Dq. When Firm A and Firm B form a Monopoly through Collusion the will split the demand in half, each firm will act as if its demand curve is Dq/2.

Firm A = Dq/2,  Firm B = Dq/2. Firm A will supply Q/2 units and Firm B will supply Q/2 units. The Market Demand curve will the combined demand curves of both firms. Market Demand Curve = Dq/2 + Dq/2 or simply Dq

8 0
3 years ago
At the price of $5 per pack of batteries, Duracell sells 10,000 packs of batteries and Energizer sells 15,000 packs of batteries
Troyanec [42]

Answer:

28,000

Explanation:

To get this answer you have to assume perfect competition scenario, since in this case supply = demand. In this case:

At $7,5

Energizer sells 16,000 => Supply Energizer = 16,000

Duracell sells 12,000 => Supply Duracell = 12,000

Total Supply = 16,000+12,000

8 0
3 years ago
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