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drek231 [11]
3 years ago
6

Shore Hotels just paid an annual dividend of $1.50 per share. The company will increase its dividend by 7 percent next year and

will then reduce its dividend growth rate by 2 percentage points per year until it reaches the industry average of 3 percent dividend growth, after which the company will keep a constant growth rate forever. What is the price of this stock today given a required return of 14 percent?
(A) $14.85
(B) $18.99
(C) $11.83
(D) $16.54
(E) $13.02
Business
1 answer:
kiruha [24]3 years ago
5 0

Answer:

(A) $14.85

Explanation:

Annual dividend just paid (D0)= $1.50

growth rate = 7% or 0.07 as a decimal

D1 ; next year's dividend = D0(1+g) = 1.50(1.07)= 1.605

growth rate = 7-2% = 5% or 0.05 as a decimal

D2; dividend yr2 = D1(1+g) = 1.605(1.05) = 1.6853

growth rate = 5-2% = 3% or 0.03 as a decimal

Terminal Cashflow; D3 = 1.6853 (1.03) = 1.7359

Next, find the present value of each dividend at 14%;

PV(D1) = 1.605/(1.14 ) = 1.4079

PV(D2) = 1.6853/(1.14² ) = 1.2968

PV of terminal Cashflow (D3 onwards) = \frac{\frac{1.7359}{0.14-0.03} }{1.14^{2} } = 12.1429

Next, sum up the PVs to find the price;

= 1.4079 + 1.2968 + 12.1429

= 14.848

Therefore the price of the stock today  is $14.85

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Which of the following taxes are paid by the employee and the employer? a.FUTA b.Federal withholding taxes c.SUTA d.FICA
vlabodo [156]

Answer:

The correct answer is letter "D": FICA.

Explanation:

The FICA (<em>Federal Insurance Contributions Act</em>) is a U.S. law that requires a paycheck deduction to be paid to <em>Social Security</em> and <em>Medicare</em>. Employers and employees share half the payment unless an individual is self-employed meaning the full amount must be covered by that person.

8 0
3 years ago
the toyota production system identified which of the following types of waste to be eliminated? multiple choice product defects.
creativ13 [48]

the Toyota production system identified product defects types of waste to be eliminated.

The manufacturing process used by Toyota Motor Corporation to produce its vehicles is frequently referred to as a "lean manufacturing system" or a "Just-in-Time (JIT) system," and it is now well known and extensively researched.

The Toyota Production System (TPS) was developed based on two ideas: "jidoka" (loosely translated as "automation with a human touch"), whereby when a problem arises, the machinery immediately stops, preventing the production of defective goods; and the "Just-in-Time" idea, whereby each process only produces what is required for the subsequent process in a continuous flow.

For Toyota, jidoka signifies that anytime an irregularity happens, a machine must stop in a safe manner.

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4 0
1 year ago
A stock listing contains the following information: P/E 17.5, closing price 33.10, dividend .80, YTD% chg 3.4, and net chg of -.
Mazyrski [523]

Answer:

B. I and III only

Explanation:

I. The stock price has increased by 3.4% during the current year.

YTD% chg 3.4% means share price change by the rate of 3.4%.

III. The earnings per share are approximately $1.89.  

P/E ratio = 17.5

Closing price = $33.10

EPS = $33.10 / 17.5

       = $1.89.

Therefore, The correct option is I and III only.

7 0
3 years ago
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Impact theory says that the moon formed from the dust produced by a collision between Earth and another large body. 
5 0
3 years ago
Read 2 more answers
Mary Andrews, Inc. had the following transactions:
katrin [286]

Answer:

$522,000

Explanation:

Given;

Cash proceeds on sale of land = $430,000

Cash proceeds on sale of equipment = $140,000

Purchase of treasury stock with cash = $53,000

Purchase of equipment with cash = $48,000

Issuance of common stock for cash = $70,000

To find the net cash provided by investing, the investing activities in the information given are; Cash proceeds on sale of land, Cash proceeds on sale of equipment, and Purchase of equipment with cash.

Purchase of treasury stock with cash and Issuance of common stock for cash are financing activities.

Net cash provided by investing activities =  $430,000 + $140,000 -  $48,000

= $522,000

The correct answer is $522,000 which is not a part of the options given.

3 0
3 years ago
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