1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
frez [133]
3 years ago
14

An investor has examined Home Depot stock and makes the following predictions for the future: YEAR 1 2 3 4 DIVIDEND $1.31 $1.58

$1.54 $1.56 The investor believes the selling price in four years will be $76.25. If the investor wants a 18.00% return to hold the stock, what intrinsic value does the investor put on Home Depot today
Business
1 answer:
Murrr4er [49]3 years ago
7 0

Answer: $43.32

Explanation:

The Intrinsic value of Home Depot Stock will be the present value of all the future cashflows from the stock.

Discounting with a rate of 18%, the intrinsic value is;

= 1.31/ ( 1 + 18%) + 1.58 / ( 1 + 18%)² + 1.54/ ( 1 + 18%)³ + 1.56 ( 1 + 18%) ⁴ + 76.25 / ( 1 + 18%) ⁴

= 1.11 + 1.1347 + 0.937 + 0.8046 + 39.3289

= 43.3152

= $43.32

You might be interested in
The activities buyers and sellers perform to facilitate mutually satisfying exchanges is:
timofeeve [1]

The activities buyers and sellers perform to facilitate mutually satisfying exchanges is marketing

<h3>Buyers and Sellers</h3>

Buyers are those that request for goods and services for consumption purpose while the sellers make goods and services available to the buyers,

Both buyers and sellers carry out activities for mutual benefit of both parties. These activity that is being performed between the parties is known as marketing.

Learn more on marketing here: brainly.com/question/25369230

#SPJ12

3 0
2 years ago
The real wages of workers will tend to be high when
DIA [1.3K]

Answer:

When labor productivity is high.

Explanation:

According to neoclassical economic theory, real wages are equal to the marginal product of labor (MLP). The marginal product of labor is the extra output produced by one extra unit of labor (one extra worker).

If the MPL is high, this means that workers are very productive, and therefore, are paid a high real wage accordingly.

This is why countries with high labor productivity like the U.S. or Switzerland also have very high real wages.

6 0
3 years ago
Cheizza, a pizza vendor in the country of Wisbane, believes that the taste of fresh cheese in its pizzas is its unique selling p
damaskus [11]

Answer:

The correct answer is letter "A": Resource scarcity.

Explanation:

Resource scarcity is the basic economic problem by which individuals have unlimited wants and needs but rely on limited sources to fulfill them. Because of this situation, individuals have to trade-off the satisfaction of part of some needs so others can be satisfied as well.

In the example, <em>the scarce resource is the milk that is useful to produce cheese for the pizzas sold in Wisbane.</em>

4 0
3 years ago
Each of two stocks, A and B, are expected to pay a dividend of $5 in the upcoming year. The expected growth rate of dividends is
salantis [7]

Answer:

a

Explanation:

Intrinsic  value can be determined using the constant dividend growth model

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid

r = cost of equity

g = growth rate

Stock A = $5/ (0.11 - 0.1) = $500

Stock B = $5/ (0.2 - 0.1) = 50

Intrinsic value of A is greater than that of B

3 0
3 years ago
If the demand for a good rises by more than the supply of the good falls, then the good’s equilibrium price will __________ and
mina [271]

Answer:

Rises

Rises

Explanation:

If the demand for a good rises more than the fall in supply, both equilibrium price and quantity would increase.

Refer to the attached image for a graphical explanation.

I hope my answer helps you

3 0
3 years ago
Other questions:
  • You’ve just graduated from Berkeley College with a major in accounting and have landed your first accounting job. Your assignmen
    5·1 answer
  • The Azuza Company owns no plant assets and had the following income statement for the year:
    5·1 answer
  • Complete the following sentence. ​If, as the price of orange juice decreases​, the quantity of grapefruit juice that people buy
    10·1 answer
  • Guns R Us overstated its ending inventory in the current year by $5,000. The company incorrectly reported $100,000 of net income
    11·1 answer
  • The following information is available for Baxter Manufacturing for April:
    12·1 answer
  • When did the stock market crash 2008 start?
    13·1 answer
  • At the end of the year, a company reports a balance in its Allowance for Uncollectible Accounts of $1,700 (debit) before any yea
    9·1 answer
  • Why has caricom produced limited improvements in interregional trade??
    7·1 answer
  • Wildhorse Company took a physical inventory on December 31 and determined that goods costing $676,000 were on hand. Not included
    10·1 answer
  • Which of these factors mostly greatly impacts business cycles
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!