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
Bezzdna [24]
3 years ago
13

Burnett Corp. pays a constant $8.45 dividend on its stock. The company will maintain this dividend for the next 15 years and wil

l then cease paying dividends forever. If the required return on this stock is 13 percent, what is the current share price?
Business
1 answer:
just olya [345]3 years ago
6 0

Answer:

56.47% is the current share price

Explanation:

To solve this question, we use the mathematical approach.

First, we calculate the current share price =

$8.45*Present value of annuity factor(11.2%,13)

But before we can get the value for the current share price, we need the value for the present value of annuity factor.

Present value of annuity factor = Annuity[1-(1+interest rate)^-time period]/rate =

8.45[1-(1.112)^-13]/0.112=

= $8.45*6.682519757 = 56.47%

You might be interested in
Darden Restaurants is expected to pay annual dividends of $1.90 and $2.10 over the next two years,respectively. After that, the
Ainat [17]

Answer:

$13.89

Explanation:

The computation of the value of stock is shown below:

Year Dividend Present value factor at 16% Present value  

1         $1.90                0.862                               $1.64

2        $2.10                 0.743                               $1.56

3        $2.30

Price $14.375             0.743                               $10.68

The price is computed below:

= $2.30 ÷ 16% = $14.375

Total present value $13.89

The present value factor is computed below:

= 1 ÷ (1 + rate) ^ years

For Year 1 = 1 ÷ 1.16^1 = 0.862

For Year 2 = 1 ÷ 1.16^2 = 0.743

7 0
3 years ago
A company is obligated to pay its creditors $6,460 at the end of the year. If the value of the company's assets equals $6,304 at
rosijanka [135]

Answer:

The shareholders equity=-$156, this means that the liabilities outweigh the assets by $156.

Explanation:

The shareholder's equity can be defined as the net value of a company. It basically is the amount that shareholders would receive if all the company's assets were liquidated and all of the company's debt also paid back. The shareholder's equity is usually found on the company's balance sheet and can be used as a financial measure to determine the company's financial status. The shareholder's equity is determined from subtracting the company's totals liabilities from its total assets. This can be expressed in the formula below;

E=A-L....equation 1

where;

E=shareholder's equity

A=total assets

L=total liabilities

The total assets represents everything that has some economic value to the company. A liability is an obligation to something or anything of economic value that the company owes. In our case, the company has an obligation to pay it's creditors $6,460 at the end of they year. This is a liability.

Use equation 1 above to solve;

E=unknown, to be determined

A=$6,304

L=$6,460

replacing;

E=(6,304-6,460)=-$156

The shareholders equity=-$156, this means that the liabilities outweigh the assets by $156.

3 0
3 years ago
Andrew Industries purchased $166,000 of raw materials on account during the month of March. The beginning Raw Materials Inventor
KatRina [158]

Answer:

$33,200= ending inventory

Explanation:

Giving the following information:

Andrew Industries purchased $166,000 of raw materials.

The beginning Raw Materials Inventory balance was $22,200, and the materials used to complete jobs during the month were $141,900 of direct materials and $13,100 of indirect materials.

To calculate the ending inventory, we need to use the following formula:

Raw materials used= beginning inventory + purchases - ending inventory

141,900 + 13,100= 22,200 + 166,000 - ending inventory

155,100= 188,000 - ending inventory

33,200= ending inventory

4 0
3 years ago
Showing a prospective buyer homes only in particular neighborhoods based on race, color, religion, sex, national origin, non-han
Nookie1986 [14]

Showing prospective buyers homes only in particular neighborhoods based on race, color, religion, national origin, non-handicapped or adults only is known as steering.

Steering is a type of discrimination whereby an actual property expert impacts someone's housing selection based on their race, faith, or some other blanketed feature covered by way of the 1968 truthful Housing Act.

Steering happens, for instance, whilst real property marketers do now not inform buyers about available properties that meet their criteria, or specific views approximately communities, with the cause of directing shoppers far from or towards positive neighborhoods due to their race or other blanketed characteristics.

Steering is directing consumers based totally on their elegance. Redlining is generally the discrimination of shoppers by the lending enterprise. Blockbusting is when an agent convinces human beings in a community to sell their residence because the socioeconomics of the network is negatively converting.

Learn more about Redlining here brainly.com/question/14605669

#SPJ4

4 0
2 years ago
has acquired several other companies. Assume that Princeton purchased Kelleher for $ 9 comma 000 comma 000 cash. The book value
Alchen [17]

Answer:

1. $ 1,000,000

2. Debit Investment in Kelleher  $ 9,000,000

   Credit Cash                              $ 9,000,000

Explanation:

1. Good will is the excess of purchase consideration over the net asset of the entity acquired. Goodwill is the excess of the amount paid to acquire a company over the book value of the company's assets and liabilities. The net assets of Kelleher can be determined as follows;

Net assets =  Assets - Liabilities

Since the market value of kelleher's assets is $ 1,000,000 ($ 20,000,000 - 19,000,000) more than the book value and the liabilities are same (market and book values,

Net asset = $ 20,000,000 - $ 12,000,000

                = $ 8,000,000

Therefore,

Goodwill = Purchase consideration - Net asset

               = $ 9,000,000 - $ 8,000,000

               = $ 1,000,000

2. Where the acquisition was done through cash, the entries to be posted by Princeston would be to debit Investments in Kelleher as an asset acquired by Princeton and credit Cash as there will be a reduction in cash on acquisition of Kelleher by Princeton. The debit and credit amounts are $ 9,000,000.

5 0
3 years ago
Other questions:
  • On december 31, slugger batting cages company decides to trade in one of its batting cages for another one that has a cost of $5
    13·2 answers
  • A deposit would appear as a debit on your bank statement. <br><br> True or False
    10·2 answers
  • es $ 160,000 Accounts receivable increase $ 10,000 Expenses: Inventory decrease 16,000 Cost of goods sold 100,000 Salaries payab
    11·1 answer
  • Several years ago, The Wall Street Journal reported that the winner of the Massachusetts State Lottery prize had the misfortune
    10·1 answer
  • Which of the following statements is a valid critique of rational choice theory?A. People will rarely choose the acceptable opti
    5·1 answer
  • What is the fifth principle of money?
    8·1 answer
  • How does the federal government's fiscal policy affect the U.S. economy?(1 point)
    6·1 answer
  • Hi guys, i need urgently some help with this question
    8·1 answer
  • Which of the following borrowing options would cost her the least? Credit card. Personal loan at bank. Student loan. Payday loan
    14·1 answer
  • 1. What is the relationship between forward rates and the market’s expectation of future short rates? Explain in the context of
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!