1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
alukav5142 [94]
3 years ago
7

The Jackson-Timberlake Wardrobe Co. just paid a dividend of $2.15 per share on its stock. The dividends are expected to grow at

a constant rate of 4 percent per year indefinitely. If investors require a return of 10.5 percent on the company’s stock, what is the current price? What will the price be in three years? In 15 years?
Business
1 answer:
docker41 [41]3 years ago
7 0

Answer:

The current price is $34.40

The price be in three years is $38.70

The price in 15 years is $61.95

Explanation:

In this question, we apply the Gordon model which is shown below:

= Next year dividend ÷ (Required rate of return - growth rate)

where,  

Current year dividend

For one year

= $2.15 × (1 + 4% )

= $2.15 × 1.04

= $2.236

The other items rate would remain the same

Now put these values to the above formula  

So, the value would equal to

= 2.236 ÷ (10.5% - 4%)

= $34.40

The price is three years would be

= $34.40 × (1.04) ^ 3 years

= $34.40 × 1.124864

= $38.70

The price is 15th years would be

= $34.40 × (1.04) ^ 15 years

= $34.40 × 1.8009435055

= $61.95

You might be interested in
Activities performed by an applicant after an interview intended to express continued interest in employment with the
goldfiish [28.3K]

Answer:

  • Activities performed by an applicant after an interview intended to express continued interest in employment with the company are referred to as follow-up activities
4 0
2 years ago
Read 2 more answers
Who is this a random girl from the web or some one else
djverab [1.8K]
Random girl from the web.
4 0
3 years ago
Read 2 more answers
As the aggregate price level in an economy rises, ____________________. interest rates increase consumer demand increases export
snow_tiger [21]

As the aggregate price level in an economy rises, A. interest rate increase.

<h3>What is interest?</h3>

It should be noted that the interest rate simply means the rate that's put on the money that's collected by an entity.

In this case, when there's an increase in the aggregate price level in an economy rises, the interest rate increase as well.

Learn more about interest on:

brainly.com/question/2294792

#SPJ1

8 0
2 years ago
A. Calculate the net present value of the following project for discount rates of 0, 50, and 100%:
kherson [118]

Answer:

Net present value when discount rate is 0% = $15,750

Net present value when discount rate is 50% = $4,250

Net present value when discount rate is 100% = $0

IRR =100%

Explanation:

The net present value is the present value of after tax cash flows from a project.

The IRR is the discount rate that equates the after tax cash flows from an investment to the amount invested.

The net present value can be calculated using a financial calculator

Cash flow in year 0 = $-6,750

Cash flow for year one = $+4,500

Cash flow in year two = +18,000

Net present value when discount rate is 0% = $15,750

Net present value when discount rate is 50% = $4,250

Net present value when discount rate is 100% = $0

IRR =100%

I hope my answer helps you

5 0
3 years ago
Rossiter Restaurants is analyzing a project that requires $180,000 of fixed assets. When the project ends, those assets are expe
Leviafan [203]

Answer:

Cash in-flow in the last year.

Explanation:

Salvage value, also known as residual value, is the amount that you receive from sale of Property, Plant, and Equipment at the end of useful life. When computing the NPV of any project, we consider all the relevant cash flows of that project. Since, $45,000 will be received when project ends from sale of Fixed asset, so this figure will be treated as Cash in-flow and discounted.

8 0
3 years ago
Other questions:
  • One primary focus of substantive tests in the finance and investment cycle is on:
    13·1 answer
  • The text identifies three goals of strategic messages. During office meetings, Sara expresses her respect for her boss by listen
    14·1 answer
  • In January, a customer buys 100 shares of ABC stock at 450. Eleven months later in December, the stock is trading at $60. The cu
    6·1 answer
  • When output increases, the PPC of the economy , indicating in the economy.
    9·2 answers
  • Karen learns from a coworker at her pharmaceutical company that one of the firm's most profitable drugs will be pulled off the m
    15·2 answers
  • The advanced industrial nations of the West committed themselves after World War II to removing barriers to the free flow of goo
    14·1 answer
  • Which PESTEL factors are the most salient for the electric vehicle segment of the car industry? Which PESTEL factors are the mos
    7·1 answer
  • Tanner Service Company reported an annual sales revenue of $560,000 in 2019. During the year, accounts receivable decreased from
    12·1 answer
  • The Fed's use of open market operations affects banks
    10·2 answers
  • Business-to-business (B2B) marketing refers to buying and selling goods or services to consumers. True False
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!