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
Naya [18.7K]
3 years ago
14

SCI just paid a dividend of $2.16 per share, and its annual dividend is expected to grow at a constant rate of 4.50% per year. I

f the required return on SCI's stock is 11.25%, then the intrinsic value of SCI's shares is _____ per share.
Business
1 answer:
guajiro [1.7K]3 years ago
8 0

Answer:

$33.44

Explanation:

The computation of the intrinsic value of the share is shown below:

= Next year dividend ÷ (Required rate of return - growth rate)

where,

Next year dividend is

= $2.16 + $2.16 × 4.50%

= $2.16 + $0.0972

= $2.2572

The required rate of return is 11.25%

And, the growth rate is 4.50%

So, the intrinsic value is

= ($2.2572) ÷ (11.25% - 4.50)

= $33.44

You might be interested in
A different ethanol processing facility costs $800,000 to construct but will instead last forever.Every year (starting the year
iragen [17]

Answer:

r = 5%

Explanation:

Construction cost 800.000

# of barrels produced 10.000

Price per barrel $4

let the interest rate = r

Equate the net present value = 0

800000 = 10000 x 4/(1 + r) + 40000/(1 + r)2 + .......

800000 = 10000 x 4/r

r = 5%

8 0
3 years ago
Which pre-test method involves asking the people being surveyed to rank the different ad concepts they see?
Sloan [31]
b order of merit test
5 0
3 years ago
Define the term corporate social responsibility and give one practical example ​
Vesna [10]

Answer:

<u>Definition:</u> Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental.

To engage in CSR means that, in the ordinary course of business, a company is operating in ways that enhance society and the environment, instead of contributing negatively to them.

<u>Example:</u> Starbucks has long been known for its keen sense of corporate social responsibility and commitment to sustainability and community welfare. According to the company, Starbucks has achieved many of its CSR milestones since it opened its doors. According to its 2019 Global Social Impact Report, these milestones include reaching 99% of ethically sourced coffee, creating a global network of farmers, pioneering green building throughout its stores, contributing millions of hours of community service, and creating a groundbreaking college program for its partner/employees.

Starbucks' goals for 2020 and beyond include hiring 10,000 refugees, reducing the environmental impact of its cups, and engaging its employees in environmental leadership.  Today there are many socially responsible companies whose brands are known for their CSR programs, such as Ben & Jerry's ice cream and Everlane, a clothing retailer.

Explanation:

4 0
2 years ago
The Harrison Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estim
Artyom0805 [142]

Answer:

the formula used to calculate the cost of equity (required rate of return) based on the bond yield plus risk premium is fairly simple:

cost of equity (Re) = yield of debt (bonds) + firm's risk premium = 11.52% + 3.55% = 15.07%

I'm not sure if the question was copied correctly or not, so I looked for similar questions and it included different numbers.

<em>The Harrison Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of internal equity. Harrison's bonds yield 10.28%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 4.95%. Based on the bond-yield-plus-risk-premium approach, Harrison's cost of Internal equity is: = 10.28% + 4.95% = 15.23%</em>

<em>Another question: </em>

<em>The Kennedy Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of internal equity. Kennedy's bonds yield 11.52%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 4.95%. Based on the bond-yield-plus-risk-premium approach, Kennedy's cost of internal equity is: = 11.52% + 4.95% = 16.47%</em>

5 0
3 years ago
Joan Osborne is evaluating a potential capital investment. She has calculated the net present value using a minimum rate of retu
antoniya [11.8K]

Answer:

The investment of Joan Osborne is expected to produce a rate of return less that 10%.

Explanation:

This implies that the expected rate of return on the investment will the minimum rate of return.

An investment with a positive NPV would produce produce  an expected rate of return higher than the minimum rate of return and vice versa.

The investment of Joan Osborne is expected to produce a rate of return less that 10%.

5 0
3 years ago
Other questions:
  • The model where the leader takes a hands-off approach is called a(n) _______________.
    10·2 answers
  • Golf course owners put their sprinklers on a ________ schedule so that people can know when they can play on the course without
    7·1 answer
  • A subdivision of a national culture based around some unifying characteristic such as religion whose members share similar patte
    15·1 answer
  • Any restructuring of operations that ____ the difference between a foreign currency's inflows and outflows may ____ economic exp
    13·1 answer
  • Suppose a stock had an initial price of $117 per share, paid a dividend of $3.10 per share during the year, and had an ending sh
    5·1 answer
  • The Analytic Hierarchy Process is being employed in a project selection decision. One major criteria, cost, receives a weighting
    7·1 answer
  • 3. Suppose you are thinking of purchasing the Moore Co.’s common stock today. If you expect Moore to pay $3.1, $3.38, $3.70, $4.
    9·1 answer
  • What is a major advantage of globalization?
    8·1 answer
  • The accountant for Eva's Laundry prepared the following unadjusted and adjusted trial balances. Assume that all balances in the
    11·1 answer
  • Population estimates show that by the year 2030, nearly 72 million of the population in the united states will come from which g
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!