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MakcuM [25]
3 years ago
12

Ever After Incorporated has common stock that is expected to grow at a rate of 15% over the next year. After this first year, it

will stabilize to a 2% long-term growth rate. If the dividend just paid (D0) was $2.33 and the required rate of return on the stock is 6%, what is the value of the stock today (to 2 decimals)?
Business
1 answer:
dem82 [27]3 years ago
4 0

Answer:

$66.99

Explanation:

The computation of value of the stock is shown below:-

= Dividend in year 1 ÷ (1 + required rate of return) + 1 ÷ (1 + required rate of return) × ((Dividend in year 1 × (1 + growth rate) ÷ (required rate of return - growth rate))

= ($2.33 × 1.15) ÷ 1.06 + 1 ÷ 1.06 × (($2.33 × 1.15 × 1.02) ÷ (0.06 - 0.02))

= $2.6795  ÷ 1.06 + 1 ÷ 1.06 × ($2.73309  ÷ 0.04)

= $2.527830189  + 0.943396226  × $68.32725

= $2.527830189  + 64.45966981

= $66.9875

or $66.99

Therefore for computing the value of stock we simply applied the above formula.

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Suppose the Alaskan king crab harvest is unregulated and any person with a crab boat and some diesel fuel can go offshore, lower
rosijanka [135]

Answer: A. Alaska auctions a limited number of licenses to harvest king crab.

Explanation:

The options include:

A. Alaska auctions a limited number of licenses to harvest king crab.

B. The U.S. and Canadian governments remove trade barriers, which allows for more trade of products like king crab.

C. Alaska removes taxes on diesel fuel, which lowers the price of diesel.

D. Alaska subsidizes the purchase of crab boats.

The socially optimal level of output will be achieved when there's allocative efficiency. It is the level whereby market failure is curtailed.

The policy choice that might produce the socially optimal king crab harvest is for Alaska to auction a limited number of licenses to harvest king crab.

This will help in the reduction at which the resource is overused as there'll be regulation and reduction in the number of person that can harvest king crab.

4 0
2 years ago
A.J., a 20-something college graduate, was recently hired as a financial-analyst assistant for a large company. He recalled that
Helga [31]

Answer:

prepare an expense record, and make certain that his credit is good so he can continue to spend more than he makes

Explanation:

Since in the question it is mentioned that an individual is recently hired as a financial analyst for a big company he remebered that how he can manage his personal finance and the financial concerns so in order to maintain its approach with respect to his own finance we should suggest that first prepare the record of an expense and also certain about the good credit score so that he is able to spend more

Therefore the first option is correct

4 0
3 years ago
The difference between total assets of a firm and its total liabilities is called_______.
Gnom [1K]

The difference between the total assets of a firm and its total liabilities is called <u>net worth</u>.

Net worth is the value of all of your property, minus the whole of all your liabilities. Positioned every other manner, it's miles what you personal minus what you owe. If you owe extra than you own, you have got a bad internet worth. if you very own greater than you owe you will have a nice net well worth.

Net worth is the price of all of the non-economic and economic assets owned with the aid of a man or woman or group minus the fee of all its fantastic liabilities. Net actual worth is the cost of all assets, minus the whole of all liabilities. placed any other manner, internet well worth is what's owned minus what is owed.

The meaning of total assets is all of the property or objects of cost, a small commercial enterprise owns. Included in total belongings are coins, bills receivable (cash thanks to you), inventory, devices, equipment, and so on.

Learn more about Net worth here brainly.com/question/12371230

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4 0
1 year ago
Management can make any form of distribution to the firm’s shareholders using the company’s free cash flow (FCF). The underlying
vovikov84 [41]

Answer:

A good use of free cash flow is to Invest in nonoperating assets

Explanation:

Free cash flow (FCF) is a measure of how much cash a business generates after accounting for capital expenditures such as buildings or equipment. This cash can be used for expansion, dividends, reducing debt, or other purposes.

If the underlying objective is to maximize shareholder wealth by increasing the firm’s value. Any use of FCF that negatively affects the firm’s value is not considered a good use of the FCF.

A good use of FCF would be to invest in nonoperating assets such as marketable securities, investments in other companies, etc.)

3 0
3 years ago
If the purpose of a licensing statute is to raise revenue, a contract with an unlicensed professional may be enforceable.
pishuonlain [190]

If the purpose of a licensing statute is to raise revenue, a contract with an unlicensed professional may be enforceable is TRUE.

Revenue raising statutes. these are licensing statutes enacted to elevate money for the government. unlicensed persons can put in force contracts and recover for rendering services.

Specialists to gain a license, authorities has some say over who can carry out which jobs as well as how many people can perform those jobs. 2. the second main purpose of licensing statutes is extra intently related to the general public interest.

Business licenses preserve corporations accountable for their sports and conduct and guard the general public's fitness and safety. professional licenses imply the quantity of competence and know-how that a specific professional possesses.

Learn more about licensing statute here:- brainly.com/question/15443448

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3 0
1 year ago
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