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iVinArrow [24]
3 years ago
13

Rylan Industries is expected to pay a dividend of $5.70 year for the next four years. If the current price of Rylan stock is $31

.27, and Rylan's equity cost of capital is 12%, what price would you expect Rylan's stock to sell for at the end of the four years
Business
1 answer:
PilotLPTM [1.2K]3 years ago
8 0

Answer: Rylan's stock would sell for $21.96 at the end of the four years

Explanation:

PV = Current Price = $31.27

D = Dividend paid each year =$5.70

r = Equity cost of capital = 12%

FV = Price of Rylan's stock at the end of four years = ??

N = Number of years = 4

PV = D [\frac{1 - \frac{1}{(1+r)^{N} } }{r} ] + \frac{FV}{(1+r)^{4} }

31.27 = 5.70 [\frac{1 - \frac{1}{(1+0.12)^{4} } }{0.12} ] + \frac{FV}{(1+0.12)^{4} }

Solve for FV,

FV = $21.96

Rylan's stock would sell for $21.96 at the end of the four years

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7 0
3 years ago
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IrinaK [193]

Arturo would incur an opportunity cost of 36 burritos if he increased his production of tacos by 27

<h3>How to find the opportunity cost</h3>

opportunity cost of Burritos

= 400 / 300

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The opportunity cost of Tacos

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For the tacos produced we would have

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Hence we would conclude by saying that Arturo would incur an opportunity cost of 36 burritos if he increased his production of tacos by 27

Read more on opportunity cost here: brainly.com/question/1549591

#SPJ1

complete question

The complete question for this particular question is in the attachment (picture)

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