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
Never use a circular saw that doesn't have a lower blade gaurd bcause the
Scorpion4ik [409]
The guard prevents you from touching the blade.
3 0
3 years ago
Assume the probability of a pessimistic, most likely and optimistic state of nature is .25, .45 and .30, and the returns associa
Snowcat [4.5K]

Answer:

E) none of the above

12.70% and 2.49% standard deviation

Explanation:

We multiply probability by the outcome to get the weighted amount, we add them and get the expected return.

probability outcome weighted

0.25          0.10   0.0250

0.45          0.12   0.0540

0.30          0.16   0.0480

expected return  0.1270

Now that we got the expected return at 12.7%

We now subtract the possible outcome with the expected return and square them:

(0.127-0.1)^2

(0.127-0.12)^2

(0.127-0.16)^2

Then we add them and divide by the sample which is 3

0.000622  

²√ 0.000622   = 0.024944383

<u><em>Final step,</em></u> will be the square root which gives the standard deviation

of 2.49% = 0.024947  

3 0
3 years ago
Hayes Bakery has sales of $30,600, costs of $15,350, an addition to retained earnings of $4,221, dividends paid of $469, interes
scZoUnD [109]

Answer:

$8,013

Explanation:

The computation of the amount of the depreciation expense is shown below:

The net income is

= An addition to retained earnings + cash dividend paid

= $4,221 + $469

= $4,690

Now the earning before tax

= (Net income) ÷ (1 - tax rate)

= ($4,690) ÷(1 - 0.21)

= $5,937

Now the earning before tax and interest is

= $5,937 + $1,300

= $7,237

So, the depreciation expense is

= $30,600 - $15,350 - $7,237

= $8,013

8 0
3 years ago
: In 2021, Garret Market remained fully open while conducting inventory, but in 2022 Garrett closed during inventory. In 2023, G
andreev551 [17]

Answer:

The answer is:

  • 2022 most accurate inventory
  • 2021 least accurate inventory

Explanation:

Garret Market uses a periodic inventory system (updates are made on a periodic basis) and in order to carry out this process correctly, the inventory should remain closed. Only in 2022 was the inventory closed, so it should be the most accurate. In 2021 the store remained fully opened and inventory was modified daily, so it should be the least accurate.

8 0
3 years ago
Read 2 more answers
Tom finds out that his coworker is sharing confidential information with a competitor. What should Tom do to handle the situatio
omeli [17]

i just asked my brother , and he goes to business school at bentley university in massachusetts, he said he was in a similar situation he said that reporting it to your supervisors is the best idea.



your welcome!!

5 0
3 years ago
Other questions:
  • The capital impairment restrictions are established to​ ________. A. provide sufficient safety to equity holders B. constrain th
    7·1 answer
  • Computing Cash Flows from Operating Activities (Indirect Method) [LO 12-2] The independent cases are listed below includes all b
    13·1 answer
  • The two major forms of employee involvement are participative management and ________. 1. job sharing 2. job rotation 3. represe
    13·1 answer
  • Which of the following tasks are NOT typically outsourced? Group of answer choices core business production noncore business acc
    10·1 answer
  • C&amp;A Cruise owns 10 ships and wants to serve 2000 passengers each week. Each cruise ship can carry 500 passengers on each voy
    9·1 answer
  • A competitive market is a market in which
    13·1 answer
  • The following are several of the accounts from a recent balance sheet.
    12·1 answer
  • The organic burrito is now on sale and costs 70% of the original price. if the original price was $8.00, what is the sale price?
    7·2 answers
  • Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $57,000, and the
    8·1 answer
  • Binta always consumes Chick-fil-A chicken with Chocolate Milkshake, she will only have some utility if she consumes them togethe
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!