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gladu [14]
3 years ago
8

The Lo Company earned $2.60 per share and paid a dividend of $1.30 per share in the year just ended. Earnings and dividends per

share are expected to grow at a rate of 5 percent per year in the future. Determine the value of the stock if the required rate of return is 12 percent.
Business
1 answer:
Kitty [74]3 years ago
3 0

Answer:

Price of stock is $18.57

Explanation:

Dividend growth method measures the stock value by taking sum of present value of all future cash flows means present value of all future dividends.

Use following formula to calculate the price of stock

Price = Dividend / Rate of return - Growth rate

According to given data

Dividend = $1.30

Required rate of return = 12%

Growth rate = 5%

Price = $1.3 / ( 12% - 5% )

Price = $1.3 / 7%

Price = $18.57

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Blue Enterprises reported cost of goods sold for 2020 of $1,307,500 and retained earnings of $5,383,000 at December 31, 2020. Bl
Sphinxa [80]

Answer: See explanation

Explanation:

Based on the information given in the question, the corrected amounts for 2020 cost of goods sold would be:

= $1307500 + $36930 - $118630

= $1225800

The corrected Retained earnings would be:

= $5,383,000 - $36,930

= $5,346,070

4 0
3 years ago
7. Allowance, a paycheck, gifts, and gains from an investment are examples of
Finger [1]

Answer:a

Explanation:

8 0
3 years ago
Manufacturing has an expected EBIT of $40,000 per year in perpetuity and a tax rate of 35%. The firm currently has no debt. Its
morpeh [17]

Answer and Explanation:

The computation is shown below:

Given that

EBIT = $40,000

Unlevered cost of capital = 14%

Cost of debt = 8%

tax rate = 35%

based on the above information,

(i)

(a) Current firm value is

Value of a perpetuity = FCFF ÷ Cost of capital

where,

cost of capital= cost of equity

 = $40,000 ÷ 14%

= $285,714

b. And, the equity value would be $285,714 as the present debt is zero

8 0
2 years ago
Which best describes how governments respond to changes in the business cycle?governments issue more currency.governments refuse
Troyanec [42]

I believe the answer is: Governments reduce spending.


When the government reduce its spending, the government would have more money in their budget to make various programs that can help the struggling economy. They could do this by providing incentives for the unemployed or providing loan programs for citizens who want to open a small business.

7 0
3 years ago
Read 2 more answers
When Natasha took over as facilities manager for Burlington Furniture Manufacturing, she was shocked to see the factory was stil
rosijanka [135]

Answer:

The correct word, that fills the gap is: New buy.

Explanation:

  • Direct repurchase: it is a shopping situation in which the purchasing department repeats orders routinely. The buyer chooses among the suppliers that appear on an "approved list". "Excluded suppliers" will try to take advantage of inefficiencies or dissatisfactions with respect to Current suppliers.
  • Modified repurchase: it is a situation in which the buyer wants to modify the product specifications, prices, delivery requirements or other conditions; In general, it involves additional participants in the decision by both parties. New task: it is a purchase situation in which a buyer acquires a product or service for the first time (building, security system).

New homework purchases have several stages: awareness, interest, evaluation, trial and adoption.

  • The industrial buyer: It makes the least number of decisions in the situation of direct repurchase and the largest, in the situation of new task. This is the biggest opportunity and the biggest challenge for the marketing people, which tries to reach as many key influencers as possible and provide useful information and help. Due to the complexity of the sales work, many companies use a missionary sales force composed of their best sellers.
6 0
3 years ago
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