Answer:
Check the explanation
Explanation:
Please the answer to this question is in the attached file
You can confirm the answer by planning income statement with the calculated amount of unit so that whenever you’re through with the calculation, you must get an income figure of 240000. As the amount of units are in decimal so +/- of small number could be possible like you will get the operating income of 240005 if you put 13077 units .
Answer:
P5
Explanation:
The value of the stock today is the present value of all the expected cash-flows that are likely to accrue to the investor who buys the share today. If an investor buys the share today, he is likely to receive D1, D2, D3, D4, D5 and in addition, using the going concern concept, the investor is also expected to receive all the dividends from D6 till infinity. The present value of the dividends D5 till infinity is equal to P5.
Imagine an investor who wants to buy the share at the end of year 5. He would value the share at that point by calculating the present value of all his expected cashflows, which would be the present value of D6, D7, D8 etc till infinity. Given a constant growth grate, the Gordon Growth Constant model can be used to find P5 as follows:
where D6 = D5(1+g)
therefore