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VikaD [51]
3 years ago
8

Hudson Corporation will pay a dividend of $2.82 per share next year. The company pledges to increase its dividend by 3 percent p

er year indefinitely. If you require a return of 10 percent on your investment, how much will you pay for the company’s stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Brilliant_brown [7]3 years ago
5 0

Answer:

An investor will be willing to pay $40.29 for this stock.

Explanation:

A constant growth dividend discount model will be used in this case because Hudson Corporation is expected to grow at a constant rate. The formula to be used is:

Price = Expected Dividend (Dividend of Year 1) / Required Return - Growth Rate

                                                          OR

Price = 2.82 / (.1 - .03) = 2.82 / .07 = $40.29.

Thanks!

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The __________ is based on all the goods and services produced in the economy, which make it a current-weights index. eco203
podryga [215]

Answer:

The __Paasche Index or Current-Weighted Index_______ is based on all the goods and services produced in the economy, which make it a current-weights index.

Explanation:

The Current-Weighted Index is an index that calculates the weighted average of prices or quantities or with the weights used proportionate to the quantities or prices of the goods.  At regular intervals, the weights have to re-calculated in line with the current realities.  This regular re-calculation of the weights, which is the basis for its name, makes it current.

8 0
3 years ago
Caroline's manager notices that she exhibits an internal locus of control when she speaks about her work. her manager should ___
Ymorist [56]
Her manager should provide incentives such as merit pay or sales <span>commissions.
Internal locus of control means that Caroline believes that her actions directly affect the consequences of those actions, which is why providing her with such incentives would have a great impact on Caroline and her work, and she would be even more productive.
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4 0
3 years ago
You plan on saving for a large home improvement project using the following cash flows: $50,000 today, $25,000 next year, and $1
lesya692 [45]

Answer:

Total= $98,000

Explanation:

Giving the following information:

You plan on saving for a large home improvement project using the following cash flows: $50,000 today, $25,000 next year, and $10,000 the following year. The account earns a 10% return per year.

We need to use the following formula:

FV= PV*(1+i)^n

FV= 50,000*1.10^2= 60,500

FV= 25,000*1.1= 27,500

FV= 10,000

Total= $98,000

8 0
3 years ago
Mays Corp. reported free cash flows for 2018 of $491 million and investment in operating capital of $321 million. Mays Corp. inc
Anon25 [30]

Answer: $975 million

Explanation:

Given the above details, we can solve for Earnings Before Tax and Interest with the following formula,

Operating Cash Flow = EBIT – Taxes on EBIT + Depreciation

Making EBIT the subject would turn it to be,

EBIT = Operating Cash Flow + Taxes on EBIT - Depreciation

We have all of the above except the EBIT and Operating Cash Flow.

Luckily we can solve for the Operating Cash Flow with the details given using,

Operating cash flow = Free Cash Flow + Investment in operating capital

Therefore,

= $491 million + $321 million

= $812 million

Operating cash flow is $812 million

Plugging it into the original formula we have,

EBIT = Operating Cash Flow + Taxes on EBIT - Depreciation

EBIT = $812 million + $309 million - $146 million

EBIT = $975 million

Earnings before Taxes and Interest is $975 million.

If you need any clarification do react or comment.

5 0
2 years ago
_____ comes into play when a manager makes a decision with a bias weighing short-term costs and benefits more heavily than longe
Stolb23 [73]

Answer:

Discounting the future cash flows

Explanation:

The reason is that the future returns will devalue with money received because of the Inflation. The money received after some years will result in fall in its value. So the amount received after some year of an equal amount to the amount today will not be worth the same. So discounting of future value receipts helps in decision making in todays value.

6 0
3 years ago
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