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galben [10]
3 years ago
14

Investors expect that Amalgamated Aircraft Parts, Inc. will pay a dividend of $2.50 in the coming year. Investors requirea 12% r

ate of return on the company's shares and they expect dividends to grow at 7% per year. Using the dividend valuation model, find the intrinsic value of the company's common shares.
Business
1 answer:
ELEN [110]3 years ago
5 0

Answer:

$50

Explanation:

Dividend discount model (DDM) is used to calculate intrinsic value of a stock. Since the dividends are expected to grow indefinitely, the formula will be as follows;

Price (P0) = D1 / (r-g)

where D1 = Next year's dividend = 2.50

r = required rate of return = 12% or 0.12 as a decimal

g = dividend growth rate = 7%

Price (P0) = 2.50/(0.12-0.07)

P0 = 2.50 /0.05

P0 = $50

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alekssr [168]

Answer:

OPTION "b" will be the correct answer.

Explanation:

From the following is the most strategic approach to take is that you could increase the chances of your current traffic choosing to convert and move down your funnel. Over time, this has the potential to drastically lower your cost to acquire a customer and positively impact your return on investment. The option "b" fulfills the demand of the situation mentioned and this will be the most significant option to be selected while suffering the situation.

8 0
3 years ago
I really really really need someone to help
rusak2 [61]

Answer:

Hi! your answer should be A. administrative law.

Explanation:

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8 0
3 years ago
What economic benefit has the debt reschedule for developing countries?
diamong [38]

Answer:

The main economic benefit that debt rescheduling has for developing countries is that it changes principal and interest payments to more favorable conditions.

This means that after the reschedule, developing countries will have to put less resources into the payments of public debt, which allows them to have more resources available for other public investments like education, healthcare, and infraestructure.

8 0
3 years ago
Mr. Hugh Warner is a very cautious businessman. His supplier offers trade credit terms of 3/19, net 60. Mr. Warner never takes t
vekshin1

Answer:

35.92%

Explanation:

The computation of cost of not taking the cash discount is shown below:-

Discount percentage ÷ (100 - Discount percentage) × (360 ÷ (Full Allowed Payment Days - Discount Days))

= 3% ÷ 97% × 360 ÷ (50 - 19)

=  3% ÷ 97% × 360 ÷ 31

=  0.03093 × 11.61290

= 0.359187

= 35.92%

Therefore for computing Mr. Warner's cost of not taking the cash discount we applied the above formula.

3 0
3 years ago
Your grandfather made an investment of $4,000 the day you were born, as such starting to earn returns immediately. His assumptio
weeeeeb [17]

Answer:

Acumulated value=57,775.84

Explanation:

this problem can be solved applying the concept of annuity, keep in mind that an annuity is a formula which allows you to calculate the future value of future payments affected by an interest rate.by definition the future value of an annuity is given by:

s_{n} =P*\frac{(1+i)^{n}-1 }{i}

where s_{n} is the future value of the annuity, i is the interest rate for every period payment, n is the number of payments, and P is the regular amount paid

But there is an special thing to keep in mind and is the initial payment so we must to calculate the 4,000 in the future so we have:

Acumulated value=s_{n} +P*(1+i)^{n}

Acumulated value=1,500*s_{18} +4,000*(1+0.06)^{18}

Acumulated value=57,775.84

3 0
3 years ago
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