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Pepsi [2]
2 years ago
9

Kay's Sewing Loft is going to reduce its annual dividend by 10 percent a year for the next two years. After that, it will mainta

in a constant dividend of $2 a share. Last year, the company paid an annual dividend of $3 per share. What is the market value of this stock if the required return is 13.7 percent? Group of answer choices
Business
1 answer:
beks73 [17]2 years ago
5 0

Answer:

The answer of the following question is $ 25.711

Explanation:

Dividend (D0)= $ 3 per share

D1 = $ 3 * (1 - 0.10) = 2.7 per share

D2 = $ 2.7 * (1 - 0.10) = 2.43 per share

P0 = $ 2 / 0.137 = $ 14.598

Market value of this stock = D1 * PVF 1 + D2 * PVF2 + P0 * PVF2

= 2.7 * 1/(1+0.137) + 2.43 * 1/(1+ 0.137)^2 + 14.598 * 1/(1+ 0.137)^2

= 3.699 + 3.141 + 18.871

= $ 25.711

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Answer and Explanation:

a. The computation of the internal rate of return is shown below:

Given that

The expected cash inlfows would be $9,400 for four years each

Rate of return is 7%

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Based on the above information

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2 years ago
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6 0
3 years ago
Your company has earnings per share of $ 4.19. It has 1.9 million shares​ outstanding, each of which has a price of $59. You are
sveticcg [70]

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If the current earnings per share of TargetCo. are $2.10, and the times earnings multiple is 12, the relative valuation should result in a $2.10 x 12 = $25.20 per stock. This means that the premium per stock = $25.20 - $21 = $4.20, and the total premium paid for all the 1.9 million shares = $7.98 million.

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Cart Vader is a new business venture aimed toward selling golf carts to be used as neighborhood recreational vehicles. The new C
storchak [24]

Answer:

d. perfect price discrimination.

Explanation:

According to my research on different pricing strategies, I can say that based on the information provided within the question the business owner is attempting to practice perfect price discrimination. This term refers to when a company charges different prices for each sale of the same product, usually charging the highest possible price and allowing room for negotiations. Which is exactly what Cart Vader is doing with it's golf carts.

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3 years ago
When Mayo Clinic conducted its analysis during the 1980s, what two segments of the general environment did it initially focus on
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