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pishuonlain [190]
3 years ago
10

Wyatt Oil presently pays no dividend. You anticipate Wyatt Oil will pay an annual dividend of $0.56 per share two years from tod

ay and you expect dividends to grow by 4% per year thereafter. IF Wyatt Oil's equity cost of capital is 12%, then the value of a share of Wyatt Oil today is:__________
Business
1 answer:
erastovalidia [21]3 years ago
5 0

Answer:

The value of a share of Wyatt Oil today is %6.25.

Explanation:

Value after of a share year 2 = (D2*Growth rate)/(Cost of capital-Growth rate)

                        = (0.56×1.04)/(0.12-0.04)

                       = $7.28  

the current value = Future dividends×Present value of discounting factor(12%,time period)

=0.56/[(1.12)^2] + 7.28/[(1.12)^2]

= $6.25

Therefore, the value of a share of Wyatt Oil today is %6.25.

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Answer:

False

Explanation:

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Answer:

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Cr. Account Receivable $24,000

Explanation:

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In July the payment is received. The cash account will be debited as the cash is received and on the other hand account receivable will be credited to remove the due balance of $24,000 from receivables balance.

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