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yulyashka [42]
3 years ago
8

The Ramirez Company's last dividend was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after whi

ch dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price?a. $41.58.b. $42.64.
c. $43.71.d. $44.80.e. $45.92.
Business
1 answer:
Greeley [361]3 years ago
8 0

Answer:

option b is correct

current stock price is $42.64

Explanation:

given data

dividend = $1.75

growth rate = 25% for 2 year

growth rate 1 = 6%

required return 2 = 12%

to find out

current stock price

solution

we will find here first stock price after 2 year that is

stock price = cash flow at 2 year end × ( 1+rate ) / ( rate 2 - rate1 )    ..................1

so here  cash flow at 2 year end = 1.75×1.25 = 2.1875

2.1875 × 1.25 = 2.734

stock price = 2.734  × ( 1+ 0.06 ) / ( 0.12 - 0.06 )  

stock price = 48.30

so stock price at 0.12 return

= cash flow at 1 year / ( 1+ rate 2 ) + cash flow at 2 year / ( 1+ rate 2 )² + stock price / ( 1+ rate 2 )²

= 2.1875 / ( 1+ 0.12 ) +  2.734 / ( 1+ 0.12 )² + 48.30 / ( 1+ 0.12 )²

= $42.64

so option b is correct

current stock price is $42.64

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A Caterpillar tractor acquired on January 12 at a cost of $171,000 has an estimated useful life of 25 years. Assuming that it wi
Kay [80]

Answer and Explanation:

a. The computation of depreciation for each of the first two years by the straight-line method is shown below:-

Depreciation

= (Assets cost - Salvage value) ÷ Useful life

= ($171,000 - 0) ÷ 25

= $6,840

For First year = $6,840

For Second year = $6,840

It would be the same for the remaining useful life

b. The computation of depreciation for each of the first two years by the double-declining-balance method is shown below:-

First we have to determine the depreciation rate which is shown below:

= One ÷ useful life

= 1 ÷ 25

= 4%

Now the rate is double So, 8%

In year 1, the original cost is $171,000, so the depreciation is $13,680 after applying the 8% depreciation rate

And, in year 2, the ($171,000 - $13,680) × 8% = $12,585.60

7 0
3 years ago
When delivering disaster assistance for tribes the best approach is:________
inna [77]

When delivering disaster assistance to tribes the best approach is to find someone who knows about each tribe to tell you how to approach them appropriately.

Tribal governments and their members are an integral part of our nation's emergency management team. Fulfilling her FEMA mission to work together to improve our nation's disaster preparedness and response requires effective inter-tribal relations.

FEMA is committed to assisting the Indian nation in its efforts to build more resilient and more prepared communities. Securing tribal communities and areas in the face of disasters In addition to necessity, FEMA shares the US government's unique interstate relations with federally recognized tribes.

FEMA recognizes the federally recognized tribal sovereignty and is committed to strengthening partnerships with tribal governments to improve emergency and disaster response capabilities across India.

learn more about Native Americans here: brainly.com/question/24724492

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8 0
1 year ago
Which of the following is not a type of fiduciary fund?
snow_tiger [21]

Answer:

The correct answer is a.Special service funds

Explanation:

This corresponds to funds used for social investment. All financial resources of a tax and non-tax nature that are generated, obtained or originated in the production or provision of goods and services that the Executing Units or public entities carry out, in accordance with the Law. They are oriented to the attention of public budget expenditures.

6 0
3 years ago
Diana likes Anakia, a tent-making company. When she saw the latest ad for its tents, she could recall how sturdy and easy to use
grigory [225]

i think it is D.Information overload

7 0
3 years ago
If a disability keeps a person from performing the __ of a job, the person does not have to be hired or retained.
Romashka [77]

Answer:

The correct answer would be, Essential Functions.

Explanation:

If a disability keeps a person from performing the essential functions of a job, the person does not have to be hired or retained.

Disability should not come between the performing of tasks or doing a job. For example if a person is disabled from legs and he cannot move around, and his job is also a desk job which does not require to move around frequently, then there shouldn't be anything which keeps him in doing his essential job duties or functions. One should not take his disability between his work. But if a disability keeps a person from performing the essential functions of a job, the person should not be hired or retained. For example, if there is a job which require frequent move around, then a physically disabled person is not fit for this job.

6 0
3 years ago
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