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
valina [46]
3 years ago
13

Company's Z's earnings and dividends per share are expected to grow indefinitely by 4% a year. Assume next year's dividend per s

hare is $3 and next year's EPS is $4. The market capitalization rate is 8%. If Company Z were to distribute all of its earnings, it could maintain a level dividend stream of $4 a share. How much is the market actually paying per share for growth opportunities?
Business
1 answer:
Kazeer [188]3 years ago
6 0

Answer:

Explanation:

First, we need to find current stock price, which equals to Next year dividend / (required rate of return - growth rate)

=4 / (0.08 - 0.04)

= $4 / 0.04 = $100

Then we can apply the found current stock price to find present value of growth opportunities

Present value of growth opportunities =current stock price - [forcasted Earning per share / required rate of return]

= $100 - ($4 / 0.08)

=$100 - $50

= $50

You might be interested in
Market structure is determined by the Group of answer choices None of the Answers are Correct. Annual revenue, costs, and profit
nignag [31]

Market structure is determined by the number and relative size of the firms in an industry.

  • Market structure describes how different industries are categorized and distinguished based on how fiercely and in what ways they compete with one another for customers' goods and services. There are four different kinds of market structures: monopolistic competition, oligopolistic markets, perfect competition, and monopolistic markets.
  • In economics, market structure illustrates how businesses are categorized and distinguished according to the sorts of items they sell and how external circumstances and elements impact their operations. It is simpler to comprehend the peculiarities of various marketplaces when there is a clear market structure.
  • The four types of economic market structures are oligopoly, monopoly, perfect competition, and monopolistic competition. The following characteristics explain why the categories are different: In oligopoly, there are few producers, many in perfect and monopolistic competition, and one in monopoly.

Thus the correct answer is Option D.

To learn more about market structure, refer: brainly.com/question/27874368

#SPJ4

6 0
1 year ago
"if Washburn achieves the sales target of 2,000 units at the $349 retail price, what will its profit be?"
dybincka [34]

Answer: $370,000

Explanation:

Your question isn't complete as there were some further questions asked before getting to this question.

The profit from 2,000 units at $349 will be:

Profit = Total revenue – Total cost

Total revenue = (P x Q)

= $349 x 2000

= $698000

Total cost = [FC + (UVC x Q)]=

= [$38,000 + ($145 x 2,000)]

=$38000 + $290000

= $328000

Profit = Total revenue - Total cost

Profit = $698000 - $328000

Profit = $370000

5 0
2 years ago
In January of 2018, the Phillips Company purchased a patent at a cost of $100,000. In addition, $10,000 in legal fees were paid
soldi70 [24.7K]

Answer:

The answer is: $113,000

Explanation:

By 2020, Phillips Company had already amortized $22,000 of the patent expenses (2 years x [10% x ($100,000 + $10,000)]). Since it lost its patent defense in 2020, it will now have to write off $113,000 ($88,000 pending amortization + $25,000 in legal fees) for the adjustment of its 2018 income.

5 0
3 years ago
When a firm declares bankruptcy, Group of answer choices the claims of preferred shareholders are honored before those of the co
Sedaia [141]

Answer:

the maximum that shareholders can lose is their original investment in the firm's stock AND the claims of preferred shareholders are honored before those of the common shareholders.

Explanation:

          Bankruptcy may be defined as the legal proceedings that involves a person or a business where the person or the business firm is not able to repay the debts that are outstanding. When a firm or a person files a bankruptcy, there is an automatic stay put by the court that blocks the debts.

         In case of bankruptcy the different shareholders of the firm losses a maximum of their original investment that they have done in the firm while purchasing the stocks. And also the claims of the preferred shareholders are being honored first than those of common shareholders.

6 0
3 years ago
How can career readiness and competence help my career​
USPshnik [31]

It can give you some insight into your career which can make you more marketable. they can also give you a leg up on the competition and also the ability to negotiate for a higher salary

6 0
3 years ago
Other questions:
  • If parts are replaced when you have work done on your vehicle, __________.
    11·2 answers
  • Adjectives are used to describe personality traits. True False
    12·1 answer
  • Find a job posting you would be interested in applying for. Write a list of 10 questions you believe an interviewer might ask. W
    10·2 answers
  • A car rental cost $90.00 last year. This year it cost $102.99. What is the inflation rate, to the nearest tenth percent?
    6·1 answer
  • Exercise 6-8 Petty cash fund with a shortage LO P2 Waupaca Company establishes a $350 petty cash fund on September 9. On Septemb
    10·1 answer
  • Andrew paid $30 to buy a potato cannon, a cylinder that shoots potatoes hundreds of feet. He was willing to pay $45. When Andrew
    15·1 answer
  • Suppose the central bank in your country has stability of the GDP growth rate as its primary goal. Faced with a choice of having
    10·1 answer
  • Catrina Santana contributed a patent, accounts receivable, and $23,000 cash to a partnership. The patent had a book value of $8,
    5·1 answer
  • assuming that prices rise over time, which inventory cost flow assumption will result in the lowest cost of goods sold?
    8·1 answer
  • What do americans consider to be a signal of progress in a business negotiations with foreigners?
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!