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kvv77 [185]
3 years ago
6

7. The stock of Top of the Muffin currently pays a dividend of $11.40. The dividend is expected to grow by 20% per year for the

next three years. In year 4 it will increase by $6.50 over the previous year, and after that point it will grow at 3% per year for the foreseeable future. If you require a 10.7% return for investing in this stock, what is a share of the stock worth to you today
Business
1 answer:
Alina [70]3 years ago
8 0

Answer:

= $291.09

Explanation:

                                                               <em>       PV of dividend ($)</em>

Year 1      11.40 × 1.2× 1.107^(-1) =                        12.357

Year 2      11.40 × 1.2^2 × 1.107^(-2)=                 13.395

Year 3      11.40 × 1.2^3 × 1.107^(-3)=                   14.521

Year 4     ( ( 11.40 × 1.2^3) + 6.50 ) × 1.107^(-4) = 17.446

Year 5 and after

<em>This will be done in two steps:</em>

<em>Step 1</em>

PV( in year 4 terms)

=( ( 11.40 × 1.2^3) + 6.50 ) × 1.107 )/ 0.107 - 0.03

<em>=$350.456</em>

<em />

<em>Step 2</em>

PV (in year 0 term)

=350.4568312× 1,107^(-4)

= 233.369

The worth of the stock

= 12.357 + 13.395 + 14.521 + 17.446 + 233.369

= $291.09

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shusha [124]

Answer:

            Dr. Investments in Associates 250,000

            Cr.            Cash                                 500,000

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          Cr.            Investments in Associates 10,000

          Dr. Investments in Associates 50,000

          Cr.     Investment revenue                    50,000

Explanation:

The equity method is a type of accounting used to incorporate investments. It is used when the investor holds significant influence over the investee but does not exercise full control over it.

An investor is deemed to have significant influence over an investee if it owns between 20% to 50% of the investee’s shares or voting rights.

- Jolley receives dividends of $10,000, which is 25% of $40,000, and records a reduction in their investment account. The reason for this is that they have received money from their investee.

- Jolley records the net income from Tige Co. as an increase to its Investment account.

4 0
3 years ago
When the Lego Movie was released to movie​ theaters, the intent was not necessarily to sell more​ Legos, but the firm did ha
Harman [31]

Answer:

The correct answer is the option B: branded.

Explanation:

To begin with, the term of <em>branded content</em>, in the field of marketing, refers to the practice that focuses in the creation of multimedia content that is funded or outright produced by and advertiser and whose main purpose is to give a message of the values of the company in the content created.

Secondly, the case of Lego is an example of branded content due to the fact that the company did not want to sell more products but instead <u>wanted to create a content that shows the values of the company such as imagination, being oneself and having fun</u>.

3 0
3 years ago
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Ray Of Light [21]

Answer:

100% will be included in the Income Statement

Explanation:

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<h3><em>B</em><em>ut remember that the depreciation calculated for the accounting period would be expensed out by $500 in the income statement, for the period generated.</em></h3>
3 0
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If an agent recommends that a client invest a portion of his portfolio in an international stock fund and is asked whether she s
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Answer:

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So in this way the agent should be responded to the current situation

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