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ladessa [460]
4 years ago
11

Procter and Gamble​ (PG) paid an annual dividend of $ 2.87 in 2018. You expect PG to increase its dividends by 8.0 % per year fo

r the next five years​ (through 2023), and thereafter by 3.0 % per year. If the appropriate equity cost of capital for Procter and Gamble is 8.0 % per​ year, use the​ dividend-discount model to estimate its value per share at the end of 2018.
Business
1 answer:
nata0808 [166]4 years ago
8 0

Answer:

$73.47

Explanation:

2.87 is the current dividend paid (D0)

Use that to find dividends for the next 5 years;

D1 = D0(1+g) ; g being the growth rate

D1 = 2.87(1.08) = 3.0996

D2 = 3.0996(1.08) = 3.3476

D3 =3.3476(1.08) = 3.6154

D4 = 3.6154(1.08) = 3.9046

D5 = 3.9046(1.08) = 4.2170

Next, find terminal cashflows;

D6 (yr 2024) = 4.2170 (1.03) = 4.3435

Find Present values of all the dividends using the 8% discount rate with the formula; PV = FV/(1+r)^{n}

PV(D1) = 2.87

PV(D2) = 2.87

PV(D3) = 2.87

PV(D4)= 2.87

PV(D5)= 2.87

PV of terminal value; PV(D6 onwards) = \frac{\frac{4.3435}{(0.08-0.03)} }{1.08^{5} }  = 59.1223

Sum up the PVs to find value per share;

$2.87 +$2.87 +$2.87 +$2.87 +$2.87+ $59.1223 = $73.47

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Business ethics: Results in a set of correct decisions made by a company Refers to a standard of business conduct Can improve bu
Firlakuza [10]

Answer:

The answer is: Refers to a standard of business conduct and can improve business decisions

Explanation:

Business ethics are the moral principles and values that guide how a company behaves. It´s a way for distinguishing if something is right or wrong.

Since any business is part of a community (or several communities in case of big corporations) its decisions are judged by the community. Customers don´t tolerate flagrant unethical business behavior, no matter what excuse.

Customers like businesses that show ethical values. That is why some corporations try to present themselves as ecological or caring about their community.  

7 0
3 years ago
Mr. Hopper expects to retire in 30 years, and he wishes to accumulate $1,000,000 in his retirement fund by that time. If the int
Karo-lina-s [1.5K]

Answer:

Annual deposit = $4100

Explanation:

Annual deposit = $4100

Number of years for retirement = 30 years

Future value of money = $1000000

Interest rate = 12%

Now use the below formula to find the annuity amount.

Annual deposit = Future value (A/F, r, n)

Annual deposit = 1000000 (A/F, 12%, 30)

Annual deposit = 1000000(0.0041)

Annual deposit = $4100

3 0
3 years ago
Dj, inc., has net working capital of $2,170, current liabilities of $4,590, and inventory of $3,860.
jenyasd209 [6]

The above answer can be explained as under -

Given,

Current Liabilities =  $ 4,590

Net working capital = $ 2,170

So, the current assets will be calculated as under -

Net working capital = Current assets - Current liabilities

$ 2,170 = Current assets - $ 4,590

Current assets =  $ 2,170  + $ 4,590

Current assets = $ 6,760

The liquid or quick assets will be calculated as -

Current assets - Inventory = Quick assets

Quick assets = $ 6,760 - $ 3,860

Quick assets = $ 2,900.

Now,

1. Current ratio = \frac{Current assets }{Current Liabilities}

Current ratio = \frac{$ 6,760 }{$ 4,590} = 1.47

2. Quick ratio = \frac{Quick assets }{Current Liabilities}

Quick ratio = \frac{$ 2,900 }{$ 4,590} = 0.63

6 0
3 years ago
Read 2 more answers
A growing trend to "Buy American" may encourage U.S. automakers to increase political pressure on Washington to pass legislation
Kazeer [188]

Answer:

C) a positive result from regulatory and economic environmental forces.

Explanation:

In the short run the whole economy will benefit, more American jobs will be created, consumers will probably get good cars at even lower prices, but on the long run the scenario may not be that good for everyone. If Toyota builds the plant, it will be the result of economic and political pressures, and that is a game that two can play, just ask farmers about the trade deal with China.

On the other hand, this is a type of deja vu (or been there, done that), and it ended up with GM and Chrysler bankrupt and Ford barely surviving. This types of policies were enforced in the 1980s by president Reagan and the famous "Made in the USA" by Bruce Springsteen. Back then Honda had a small factory and Toyota was starting to consider building a plant in the US, Nissan hadn't showed up yet. Fast forward a few years and the only good American vehicles are pickups, the Japanese brands wiped out the rest. The country is full of Camrys, Accords, Civics, Corollas, CRVs and Rav4s. They are great cars, too great for the American car manufacturers to compete against. Who knows, with this type of policies maybe in 10 years the only American car manufacturer left will be Tesla.

This is like playing with fire on top of a fuel truck.

5 0
3 years ago
HELP PLSSSSSS ECONMICS<br> qjhewdkvdfjndbc vjdsncxkjd
larisa86 [58]

Answer:

C. Country A would focus on growing carrots to trade with country country B.

Explanation:

Country A can produce twice as many carrots as country B. this indicates that country A seems to have a comparative advantage over Country B in carrot production. Both countries have equal capacity in the production of apples.

Country A should focus on producing carrots for sales to country B. It can produce double what country B can, meaning its production costs are lower. Country A can sell carrots to country B at a lower price than it would cost country B to produce its carrots. Therefore, country A would be prudent to focus on producing carrots and trade them to country B.

8 0
3 years ago
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