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Dvinal [7]
3 years ago
13

ne of the most important components of stock valuation is a firm’s estimated growth rate. Financial statements provide the infor

mation needed to estimate the growth rate. Consider this case: Robert Gillman, an equity research analyst at Gillman Advisors, believes in efficient markets. He has been following the mining industry for the past 10 years and needs to determine the constant growth rate that he should use while valuing Pan Asia Mining Co. Robert has the following information available: • Pan Asia Mining Co.’s stock (Ticker: PAMC) is trading at $16.25. • The company’s stock is expected to pay a year-end dividend of $0.78 that is expected to grow at a certain rate. • The stock’s expected rate of return is 7.80%. Based on the information just given, what will be Robert’s forecast of PAMC’s growth rate?
Business
1 answer:
SVEN [57.7K]3 years ago
8 0

Answer:

7.752 %

Explanation:

The growth can be calculated as follows:

P_{o} = \frac{D_{i} }{(r_{s} - g) }

16.25 = \frac{0.78}{7.80-g}

Making g the subject of formula yields:

16.25 (7.80 - g) = 0.78\\          7.80 - g   = 0.048\\                     g   = 7. 752

Therefore, the growth will be 7.752 %

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Northern Air has dozens of flights daily into and out of Belleville Airport, which is highly congested. Northern Air depends for
gladu [14]

Answer:

The answer is E.

Explanation:

Given the information about the airline company Northern Air and their problem with Belleville airport, when we evaluate the options for any disadvantages for Northern Air we can say that;

Option A, being able to schedule flights without stopping for refueling is completely an advantage for Nothern Air.

Option B, the decline of the cost of aviation fuel over the next several years can only cause a problem if the amount they will save from their fuel costs and other costs are going to exceed the amount that will be spent on the Skybuses.

Option C, several mechanics losing their jobs is certainly not the most serious disadvantage Northern Air is going to have from this action.

Option D, the fact that none of Northern Air's competitors in the Belleville Airport are buying Skybuses is not a disadvantage for Northern Air.

Option E, the aerodynamic of the Skybus causing turbulence and therefore leading the delay for the take-off could be a serious disadvantage because of its affects to the company's strict flight schedules.

I hope this answer helps.

4 0
3 years ago
A different ethanol processing facility costs $800,000 to construct but will instead last forever.Every year (starting the year
iragen [17]

Answer:

r = 5%

Explanation:

Construction cost 800.000

# of barrels produced 10.000

Price per barrel $4

let the interest rate = r

Equate the net present value = 0

800000 = 10000 x 4/(1 + r) + 40000/(1 + r)2 + .......

800000 = 10000 x 4/r

r = 5%

8 0
3 years ago
What percentage of your income should you save
Eva8 [605]
At least 20% should go to ur savongs
7 0
4 years ago
You purchased 5,400 shares in the New Pacific Growth Fund on January 2, 2016, at an offering price of $63.90 per share. The fron
Alexxandr [17]

Answer:

The total return from this investment is -2.35%

Explanation:

According to the give data You invested = 5,400 x $63.90 = $345,060

Because of the front-load, your effective investment = $345,060 x (1 - 5%) = $327,807

Value of assets increases by 6% in 2016, hence, your investment value = $327,807 x (1 + 6%) = $347,475

Fund expense of 1.87% must be deducted from this value, Investment value = $347,475 x (1 - 1.05%) = $343,826

Now, because you withdrew within a year, back-end load of 2% is applicable as well.

Hence, your net withdrawal =$343,826 x (1 - 2%) = $336,949

Hence, total return = $336,949 / $345,060 - 1 = -2.35%

The total return from this investment is -2.35%

4 0
3 years ago
Wally offers to repair and service a forklift for valu lumber outlet, but wally dies before valu accepts. most likely, wally's d
Furkat [3]
D.terminates the offer
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