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Ahat [919]
3 years ago
15

experiencing rapid growth. Dividends are expected to grow at 25 percent per year during the next three years, 18 percent over th

e following year, and then 8 percent per year, indefinitely. The required return on this stock is 15 percent, and the stock currently sells for $60.00 per share. What is the projected dividend for the coming year
Business
2 answers:
jeka943 years ago
8 0

Answer:

<em>D = 2.15</em>

Explanation:

let D be next year dividend

D2 = D * 1.3 = 1.3D

D3 = D * 1.3^2 = 1.69D

D4 = D * 1.3^2 * 1.2 = 2.028D

price at year 4 = D * 1.3^2 * 1.2 * 1.05/(0.11-0.05) = 35.49D

current price = 60

=>

D/1.11 + 1.3D/1.11^2 + 1.69D/1.11^3 + 2.028D/1.11^4 + 35.49/1.11^4 = 60

pychu [463]3 years ago
5 0

Answer:

The coming year dividend is 2.9762

Explanation:

Let us suppose the dividend of the current year is x so

Value=\sum \dfrac{Div (1+r\%)^n}{1+rr\%}

Here div is the dividend which is to be found as x

r is the growth rate given as 25% for first 3 years, 18% for fourth year and 8% onwards

rr is the stock rate of return which is given as 15%

Current value is given as 60

So

60= \dfrac{x (1.25)^1}{(1.15)^1}+ \dfrac{x (1.25)^2}{(1.15)^2}+\dfrac{x (1.25)^3}{(1.15)^3}+\dfrac{x (1.25)^3(1.18)^1}{(1.15)^4}+\dfrac{x (1.25)^3(1.18)^1(1.08)^1}{(0.15-0.08)(1.15)^4}\\\dfrac{1.25x}{1.15}+\dfrac{1.5625x}{1.3225}+\dfrac{1.953125x}{1.520875}+\dfrac{2.3046875x}{1.74900625}+\dfrac{2.4890625x}{0.1224304375}=60\\x=2.381

So the current year dividend is 2.381, the next year dividend is given as

Next year =Current Year * (1+r%)

Next year =2.381 * (1.25)

Next year=2.9762

So the coming year dividend is 2.9762

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b. Income from both sole proprietorship and partnerships is taxed as individual income.

Explanation:

According to the following statements, the correct option is b. as income from both sole proprietorship and partnerships is taxed as individual income as there is no specific tax rates or separate tax rate so, in this forms of business organization, the income that is generated should be filed in their individual tax return

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To solve:
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Answer:

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Explanation:

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to record return of goods

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to record payment of freight

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Inventory balance:

<em>   DEBIT         CREDIT</em>

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