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Yanka [14]
2 years ago
12

Combined communications is a new firm in a rapidly growing industry. the company is planning on increasing its annual dividend b

y 21 percent a year for the next 4 years and then decreasing the growth rate to 5 percent per year. the company just paid its annual dividend in the amount of $1.10 per share. what is the current value of one share of this stock if the required rate of return is 8.50 percent? $52.25 $45.73 $57.36 $56.86
Business
1 answer:
frozen [14]2 years ago
3 0

The annual Dividend (D0) = $1.10

D1 = $1.10 * (1+0.21)^1 = $1.33

D2 = $1.10* (1+0.21)^2 = $1.61

D3 = $1.10* (1+0.21)^3 = $1.95

D4 = $1.10 * (1+0.21)^4 = $2.36

D5 = $1.10*(1+0.05) = $2.48

Now the price of the stock at the end of the fourth year (P4) = $2.48/(0.085-0.05)

P4 = $2.48 / (0.035)

P4 = $70.85

Now the Price of the stock (P0) = $1.33/(1+0.085) + $1.61/(1+0.085)^2 +$1.95/(1+0.085)^3 + $2.36/(1+0.085)^4 + $70.86/(1+0.085)^4

Price of the stock (P0) = $1.23 +$1.37 + $1.53 + $1.70 + $51.13

Price of the stock (P0) = $56.86

Therefore the correct option is d, $56.86

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- Name the six business management perspectives that go beyond planning, controlling, and decision making?
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Answer 4:

Following are the six business management perspective:

  1. Ethical Stance
  2. Strategic aspects of the decision
  3. Risk Management
  4. CSR Aspect
  5. Process Management Aspects
  6. Leaders Perspective

Answer 5:

IMA stands for Institute for Management Accountants.

The IMA Statement of Ethical Professional Practice has listed following four standards for the professionals who are member of IMA to comply with:

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  2. Confidentiality: Must not breach the confidentiality implied duty on him except in situations when disclosure of information is mandatory by law.
  3. Integrity: Must be straight forward and there must be no self interest in his dealings with the company and must considerably reduced.
  4. Credibility: Communicate the results with unbiased decision making.

Answer 6:

Because freedom does not means that our self interest is everything. We owe duty of care to people who rely on our acts. An accountant, auditor or internal auditor must act ethically or universally that benefits everyone without breaking the laws and ethical duties imposed by the professional bodies. If we go back to Enron case, we see that the External auditor was not acting in the public interest and as a result Enron which was the world's first $100 billion dollars company collapsed. The collapse of Enron bankrupt many pension companies which further affected the lives of the ordinary person in the USA. Furthermore, due to collapse of Enron, a lot of people withdraw the amount invested in Stock exchange. Dozens of companies and millions of people suffered from this unethical behaviour of professionals.

Answer 7:

Corporate Social Responsibility means that the company is just like an human being and its operations must not harm the environment, so this the least duty which the stakeholders expect from them. Being a good social beings, the companies must try to stable the environment situation in its surrounding and wherever its stakeholders live. For Example, The refinery companies have stopped poluting the oceans with their oil spills, now they have opted to newest technology that will eliminate the harmful effects of their oil spills and bring stability in the environment.

Another example includes the lower usage of natural resources. In UK it is the companies responsibility to reduce its natural resources usage which will lower the pollution. This additional care has a cost and may lead to lower competitiveness of the products so there must be a law globally that enforces to act socially responsible.

7 0
2 years ago
A teacher has decided to take her fifth grade class to a play. The manager of the theater agreed to discount the regular ​$35 pr
MArishka [77]

Answer:

40 students

Explanation:

The cost of the bus is $480

For x students, the cost of each ticket will be 35 - 0.30x

The total cost of the tickets for x students will be x(35 - 0.30x)

To find the number of students that will make the cost per student equal to $33, we solve for x:

<u>480+ x(35 - 0.30x)</u>  =35

                x

480+ x(35 - 0.30x<u>)</u>   = 35x

480 + 35x - 0.30x²   = 35x

480                            = 0.30x²

1,600                          = x²

40                               = x

The cost per student will be $35 if the number of students is 40; it will be less than $35 if the number of students is greater than 40.

8 0
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