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Reil [10]
3 years ago
9

Orwell building supplies' last dividend was $1.75. Its dividend growth rate is expected to be constant at 19.00% for 2 years, af

ter which 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
Business
1 answer:
Contact [7]3 years ago
5 0

Answer:

$38.74

Explanation:

Div₀ = $1.75

Div₁ = $2.0825

Div₂ = $2.4782

Div₃ = $2.6269 and grow at a 6% constant rate forever

required rate of return = 12%

using growing perpetuity formula to determine the terminal value of the stock in year 2 = $2.6269 / (12% - 6%) = $43.78

the stock's current price = $2.0825/1.12 + $2.4782/1.12² + $43.78/1.12² = $1.86 + $1.98 + $34.90 = $38.74

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Jordan, Inc., holds 75 percent of the outstanding stock of Paxson Corporation. Paxson currently owes Jordan $400,000 for invento
Marat540 [252]

Answer:

Because this is an inter-entity balance then the amount that should be eliminated of this debt is the letter D. all the $400,000.

Explanation:

Inter entity balance facilitates the management of allocations and transfers between entities. They provide a better control over transactions spanning multiple entities, other benefit is that the accuracy of the financial data improves and finally and this is why the anser is option D. is that it keeps each entity in balance

4 0
3 years ago
or each of the following items, indicate to which major group of the CPI the item belongs: a. Tuition payments to your universit
sergiy2304 [10]

Answer:

a. education; b. housing; c. transportation; d. food and beverages; e. recreation; f. medical care

Explanation:

CPI or consumer price index represents the costs of basket of goods and services across the country on monthly basis and includes the following categories:

  1. housing
  2. apparel
  3. transportation
  4. education and communication
  5. other goods and services
  6. recreation
  7. medical care
  8. food and beverages

a. Education

b. housing

c. transportation

d. food and beverages

e. recreation

f. medical care

5 0
2 years ago
On March 1, 2018, E Corp. issued $1,400,000 of 8% nonconvertible bonds at 103, due on February 28, 2028. Each $1,000 bond was is
Anvisha [2.4K]

Answer: $126,000

Explanation: Shareholders equity can be defined as the total amount of investment done by the shareholders in the company. This investment can be done through various kinds of securities like common stock, preference shares.

As per this problem shareholder equity would be

= (no. of shares to be collected by warrant holders)*(price of each warrant)

and,

no. of shares to be collected = (1400 bonds) * (30 shares)

                                                  = 42,000 shares

.

therefore, equity :-

(42,000 shares) ( $3 ) = $126,000

6 0
3 years ago
A cbs news/new york times poll found that 329 out of 763 randomly selected adults said they would travel to outer space in their
iren [92.7K]

Answer:

0.339 < p < 0.461

Explanation:

Given data:

confidence interval is 92%

Randomly selected adults = 329

Total number of adults is 763

\alpha = 1 - 0.92 = 0.08

\frac{\alpha}{2} = \frac{0.08}{2} = 0.04

for alpha = 0.04

z value is = 1.75

p = \frac{329}{763} = 0.43

= p \pm z \times \sqrt{\frac{p \times (1-p)}{N}

= 0.43 \pm 1.75 \tiimes \sqrt{\frac{0.43  \times0.57)}{763}

=0.43 \pm 0.031

0.339 < p < 0.461

4 0
3 years ago
Worthy Ships initially issued 400,000 shares of $1 par stock for $2,000,000 in 2021. In 2023, the company repurchased 40,000 sha
liq [111]

Answer:

Worthy Ships:

Treasury Stock account balance would be $80,000.

Explanation:

Treasury Stock account is a contra account to the Common Stock account.  Using the cost method, the account will have a debit entry and balance of $400,000 in 2023.  In 2024, with the resale of shares, the account will have a credit entry of $320,000.  This would bring the balance to $80,000 at the end of 2024.

8 0
3 years ago
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