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Alika [10]
3 years ago
11

LED​ Corp.'s common stock paid​ $2.50 in dividends last year ​(D0​). Dividends are expected to grow at a 12minuspercent annual r

ate forever. If​ LED's current market price is​ $40.00, and your required rate of return is 23​ percent, should you purchase the​ stock?
Business
1 answer:
frozen [14]3 years ago
6 0

Answer:

No, you should not purchase the stock as the stock is over priced.

Explanation:

Stock Price should be

Stock Price = Dividend last year / Required Rate of Return

                   = $2.50 / 23%

                   = $10.86

The current market price of the stock is $40 so the stock is over priced as it is $10.86 that is why you should not purchase the stock.

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Ace Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outs
REY [17]

Answer:

b. $50,000 in total

Explanation:

Preference shareholders: The preference shareholders are that shareholders who receive the divided before equity shareholders

The computation of the annual dividend is shown below:

= Number of shares × price per share × rate

= 10,000 shares × $100 × 5%

= $50,000

The annual dividend for preference shareholders will be computed by applying the number of shares, the price per share, and the rate.

5 0
3 years ago
ErgoWorld Inc. manufactures office furniture. The company is considering adopting a modular production system. A modular system
kari74 [83]

Answer: D. customers have heterogeneous demands which are expected to be met in a cost-effective way.

Explanation:

The options are:

A. most customers are likely to agree on a single product configuration.

B. customers prefer to upgrade their products by replacing their entire system.

C. customers are willing to pay a premium price for extreme customization and personalization.

D. customers have heterogeneous demands which are expected to be met in a cost-effective way.

Modular production system refers to a production system whereby the workers set their own standards and then work together for production purpose.

Based on the scenario given, a modular system would offer greater value to ErgoWorld when the customers have heterogeneous demands that are expected to be met in a cost-effective way.

5 0
3 years ago
quizlet fairwell lending must seek the court’s permission to foreclose on a property used as collateral for a loan that is in de
vladimir1956 [14]

It is most likely that a judicial foreclosure will be used when a lending seek the court’s permission to foreclose on a property used as collateral for a loan that is in default.

<h3>What is a foreclosure process?</h3>

Basically, a foreclosure refers to the legal process that allows lenders to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property.

The judicial foreclosure involves the foreclosure proceedings that take place through the court system. This process occurs when a mortgage note lacks a power of sale clause which would legally authorize the mortgage lender to sell the property if a default occurred.

Read more about foreclosure process

brainly.com/question/15182362

#SPJ1

8 0
2 years ago
Climatic conditions would be considered as what factor of production. A.Labour. B.Enterprise. C.Land. D.Capital​
Cerrena [4.2K]
It would be C. land
5 0
3 years ago
Your factory has been offered a contract to produce a part for a new printer. The contract would last for three? years, and your
emmasim [6.3K]

Answer and Explanation:

As per the data given in the question,

                  ($ million)                             ($ million)

Year Cash flows PVF at 8.2% Present value

0         -8.05             1                   -8.05

1          5.08             0.9242   4.70

2          5.08            0.8542           4.34

3           5.08             0.7894   4.01

Net present value                4.99

   

Internal rate of return                  0.40

Net present value = $4.99 million

The project should be accepted

Yes, The IRR rule is agree with NPV.

Please find the attachment for better understanding

3 0
4 years ago
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