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I am Lyosha [343]
3 years ago
14

BC 'n D just paid its annual dividend of $.60 a share. The projected dividends for the next five years are $.30, $.50, $.75, $1.

00, and $1.20, respectively. After that time, the dividends will be held constant at $1.40 per share. What is this stock worth today at a discount rate of 14 percent
Business
1 answer:
Lemur [1.5K]3 years ago
6 0

Answer:

$7.60

Explanation:

Find PV dividend per year at 14% discount rate;

0.30 / 1.14 = 0.2632

0.50 / 1.14² = 0.3847

0.75 / 1.14³ = 0.5062

1 / (1.14^4) = 0.5921

1.20 / (1.14^5) = 0.6232

Find the PV of the terminal cashflow;PV = \frac{\frac{1.40}{0.14} }{(1.14)^{5} }  = 5.2308

Next, sum up the PVs to find the price of the stock today;

Price = 0.2632 + 0.3847 + 0.5062 + 0.5921 + 0.6232 + 5.2308

= $7.60

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A listing agreement is a contract between the property proprietor and the estate broker. The listing agreement must have been an exclusive right to sell.

<h3>What is Exclusive Right-to-Sell Listing Agreement?</h3>

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Therefore, the listing agreement is Exclusive Right-to-Sell.

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2 years ago
Assume that we are in the MM world. Health and Wealth Company is financed entirely by common stock that is priced to offer a 12
Levart [38]

Answer:

13%

Explanation:

the new cost of equity = old cost of equity + [(debt / equity) x (old cost of equity - cost of debt)]

the new cost of equity = 12%+ [(20 / 80) x (12% - 8%)] = 12% + 1% = 13%

Since we are in the MM world, taxes do not exist, therefore they are not included in the equation.

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3 years ago
What do individual shareholders gain when they buy shares of a company’s stock?
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I think the answer is A
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Why do we practice making associations with simple and mundane problems and resources? Select all that apply.
Artyom0805 [142]

Answer:

E.  They are problems and resources that most people have experience with or can relate to.

Explanation:

  • Such problems and resources are most commonly found in day to day lives. People can easily relate to them as they are simple and common in the workplace.
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Answer: It is less severe than a material weakness

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