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Alinara [238K]
3 years ago
13

The Starr Co. just paid a dividend of $1.85 per share on its stock. The dividends are expected to grow at a constant rate of 4 p

ercent per year, indefinitely. Investors require a return of 12 percent on the stock.What is the current price?
What will be the price in three years?
What will be the price in 14 years?
Business
1 answer:
Natasha2012 [34]3 years ago
7 0

Answer:

Explanation:

Last dividend = $1.85 (D0)

growth rate = 4% (g)

Current year dividend (D1) = 1.85*(1+0.04) = $1.924

r = 12%

Current price = D1/(r-g) = 1.924/(0.12-0.04) = 24.05

Price in 3 years = D4/(r-g) = D0*(1+g)^4/(r-g) = 1.85*1.04^4/0.08 = $27.0529792

Price in 14 years = D14/(r-g) = D0*(1+g)^15/(r-g) = 1.85*1.04^15/0.08 = $41.647

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Nuetrik [128]
This is tough to answer in 3-5 sentences, and tends to also be a heavy identifier of your possible political leanings.  You'll have to apologize if some of mine leak out in the response, but this is a question we debate hotly more frequently than every 4 years.

In general, international trade can help increase the GDP and overall profits for US-based corporations.  However, if all we do is export, and we don't import, other countries don't look favorably upon that and may heavily tax our goods to counter this.

I believe we do need to be thoughtful about the amounts and kinds of international trade that we engage in.  For example, farming is always a hotly debated issue for international trade, in part because farmers in other countries with a dramatically lower cost of living OR farmers in countries with a favorable currency rate (exchange from their currency to our dollars gives them an advantage) can undercut our farmers here in the US, many of whom are already struggling.

There are also those who are worried that when we import produce from countries that have not outlawed pesticides we know are carcinogenic, for instance, this creates not only a disadvantage for US farmers, but also for consumers who may be concerned about health issues.

As another example of this, many countries outlawed import of US beef during the Mad Cow Epidemic.  We in turn also placed bans on importing beef from the UK.  

These are examples of why it's important to be thoughtful about trade, but there are certainly many others, including decline in production jobs within the US that have left cities like Detroit a ghost town (this was formerly the hub of our automotive industry production).
5 0
3 years ago
Sean Davis is the owner, president, and primary salesperson for Davis Manufacturing. Because of this, the company's profits are
Natali5045456 [20]

Answer:

The related cash flows to Sean are as follows;

a. $424,000

b. $592,000

c.$399,808

d. $512,885

Explanation:

In this question, we are asked to calculate cash flows to Davis manufacturing given that debt is issues and equity is issued for a number of hour-week

We proceed as follows;

a. For a 40 - hour week and Debt is issued

Mathematically, the cash flow is calculated below as follows;

Cash Flow = EBIT - Interest on debt = $594,000 - ($1.7 million x 10%) = $424,000

b. For a 50 - hour week and Debt is issued

Mathematically, the cash flow is calculated as follows;

Cash Flow = EBIT - Interest on debt = $762,000 - ($1.7 million x 10%) = $592,000

c. For a 40 - hour week and Equity is issued

Mathematically, the cash flow is calculated as follows;

In this case, there will be no interest cost

The firm's value will be increased by the amount of infusion but ownership of sean will be diluted.

New ownership of Sean = $3.5 million / ($3.5 million + $1.7 million) = 0.67307692307

Mathematically, the cash flow is calculated as follows

Cash Flow to Sean = EBIT x new share = $594,000 x 0.67307692307 =  $399,808

d. For a 50 - hour week and Equity is issued

The calculation is as above and there is also no interest course

Cash Flow = EBIT x new share = $762,000 x 0.67307692307 =  $512,885

KINDLY NOTE EBIT IS EARNINGS BEFORE INTEREST AND TAXES

5 0
3 years ago
A sample consensus formula for fluid replacement recommends that a balanced salt solution be administered in the first 24 hours
sp2606 [1]

Answer:

A 176-lb (80-kg) man with a 30% burn should receive a minimum of 2,400 ml of fluid replacement in the first 8 hours

The answer is option b. 2,400 ml

Explanation:

<em>Step 1: Determine total minimum ml per percentage of burn</em>

Minimum ml per kg=2 ml

The man is 80 kg

Total minimum ml to be administered per percentage of burn=minimum ml per kg×weight of the man

replacing;

Total minimum ml to be administered= 2×80=160 ml per percentage

<em>Step 2: Determine total minimum ml  in the first 24 hours</em>

This can be expressed as;

Total minimum ml to be administered=Total minimum ml to be administered per percentage of burn×percentage of burn

where;

Total minimum ml to be administered per percentage of burn=160 ml per percentage of burn

percentage of burn=30%

replacing;

Total minimum ml to be administered in the first 24 hours=160×30=4,800 ml

<em>Step 2: Determine total minimum ml  in the first 8 hours</em>

total minimum ml to be administered in the first 8 hours=50%×4,800

(50/100)×4,800=2,400 ml

A 176-lb (80-kg) man with a 30% burn should receive a minimum of 2,400 ml of fluid replacement in the first 8 hours

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Drupady [299]

Answer:

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3 years ago
On January 1, 2021, Adams-Meneke Corporation granted 25 million incentive stock options to division managers, each permitting ho
Olegator [25]

Answer:

Required Solution

Explanation:

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3 years ago
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