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dlinn [17]
3 years ago
5

You are considering buying a share of stock in XYZ Corporation. At the end of years 1, 2, and 3 the stock will pay you a dividen

d of $15. In addition, at the end of the third year you expect to sell the share of stock for $100. If the interest rate is 3%, how much is the share of XYZ stock worth to you today
Business
1 answer:
Flura [38]3 years ago
6 0

Answer:

The stock price will be the present value of this investment which is at $133.735.

Explanation:

The cash inflows which is dividend here will be discounted at 3% annuity fator by:

Present value of cash dividend = Cash flow * Annuity factor for 3 years at 3%

PV = $100 * [1-(1+3%)^3 years] /3%  = $15 * 2.829 = $42.235

The present value of the future cash inflow arising from the sales of stock for $100 can be calculated by:

Present Value = Cash inflow * Discount factor

Present Value =  $100 * (1+3%)^3 years = $100 * 0.915 = $91.5

Total Present Value  = Present Value of Dividends + Present value of stock

Total Present Value  = $42.235 + $91.5 = $133.735

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Answer:

D

Explanation:

Net working assets is current assets less current liabilities

Current assets include cash, cash equivalents and inventory

Examples of current liabilities include accounts payables, short-term debt, accrued expenses, and dividends payable

When inventory is purchased with cash, inventory increases and cash reduces, thus there is no change in net working capital

Net working capital can be negative or positive.

If current assets is greater than current liabilities, it would be positive, if this is not the case, it would be negative.

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lana66690 [7]
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yan [13]

Answer:

D. A software developer requires leadership skills.

Explanation:

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According to that, a software developer differ from a computer programmer because a software developer requires leadership skills as they will have to supervise all the process to create a program and work with people.

8 0
3 years ago
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Answer:

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