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malfutka [58]
3 years ago
14

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 24 percent for the next three years, with the growth

rate falling off to a constant 7 percent thereafter. If the required return is 11 percent, and the company just paid a dividend of $2.05, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
ohaa [14]3 years ago
4 0

Answer:

The current price per share is $84.16

Explanation:

The dividend discount model (DDM) estimates the value of a share/stock based on the present value of the expected future dividends from the stock. We will use the two stage growth model of DDM here as the growth in dividends of the stock is divided into two stages.

The formula for current price under two stage growth model is,

P0 = D0 * (1+g1) / (1+r)  +  D0 * (1+g1)^2 / (1+r)^2 + ... + D0 * (1+g1)^n / (1+r)^n  +

[( D0 * (1+g1)^n * (1+g2)) / (r - g2)] / (1+r)^n

Where,

g1 is initial growth rate

g2 is the constant growth rate

r is the required rate of return

So, the price of the stock today will be,

P0 = 2.05 * (1+0.24) / (1+0.11)  +  2.05 * (1+0.24)^2 / (1+0.11)^2  +  

2.05 * (1+0.24)^3 / (1+0.11)^3  + [( 2.05 * (1+0.24)^3 * (1+0.07)) / (0.11 - 0.07)] / (1+0.11)^3

P0 = $84.1556 rounded off to $84.16

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Explanation:

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Beth's role to maintain team organization and communicate the project status describes a: Project Manager.

<h3>What is project management?</h3>

Project management can be defined as the process of designing, planning, developing, leading and execution of a project plan or activities using a set of skills, tools, knowledge, techniques and experience to achieve the set goals and objectives of creating a unique product or service.

<h3>Who is a project manager?</h3>

A project manager can be defined as an individual who is saddled with the responsibility of assembling a team that have common aims, goals, and objectives, in order to execute and implement a project successfully.

In conclusion, we can infer and logically deduce that Beth's role to maintain team organization and communicate the project status describes a project manager.

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Complete Question:

Beth works with project stakeholders to maintain team organization and communicate the project status Select Beth's role in the organization.

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A cash flow is a real or virtual movement of money.

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