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Mumz [18]
3 years ago
7

Dee's made two announcements concerning its common stock today. First, the company announced that the next annual dividend will

be $1.58 a share. Secondly, all dividends after that will decrease by 1.15 percent annually. What is the value of this stock at a discount rate of 15.5 percent?a.$9.49 b.$10.10 c.$9.82 d.$10.51 e.$11.01.
Business
1 answer:
anzhelika [568]3 years ago
5 0

Answer:

The price per share today is a.$9.49

Explanation:

The value of the stock today can be calculated using the constant growth model of the DDM. The constant growth model is applicable when dividend are growing at a constant rate forever. the growth rate here is negative thus g will be -1.15%

The formula for Constant growth model is,

Price = D1 / r - g

Using the formula, we calculate the price per share today to be:

Price = 1.58 / (0.155 + 0.0115)

Price = $9.49

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Hammerstein Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock award plan,
olchik [2.2K]

Answer:

A. $40,000,000

B.No entry

C.Dr Compensation Expense 10,000,000

Cr Paid-In-Capital- Restricted Stock 10,000,000

D. $34,000,000

Explanation:

A.$20 * 2M Shares

= $40,000,000

B. No Entry

C.

Dr Compensation Expense 10,000,000

($40,000,000/ 4yrs)

Cr Paid-In-Capital- Restricted Stock 10,000,000

D.$20 * 2M Shares * 85%

= $40,000,000*85%

= $34,000,000

8 0
4 years ago
A firm in a purely competitive industry has a typical cost structure. The normal rate of profit in the economy is 5 percent. Thi
Nadya [2.5K]

Answer: The answers are given below

Explanation:

a. What is its percentage rate of return?

From the question, we are told that the firm is earning $5.50 on every $50 invested by its founders. The percentage of return will now be:

= $5.50/$50 × 100%

= 0.11 × 100%

= 11%

b. Is the firm earning an economic profit? If so, how large?

The economic profit will be the difference that exists between the percentage of return which is 11% and the normal rate of profit which is 5%. This will be:

= 11% - 5%

= 6%

The firm is earning economic profit of 6%.

c. Will this industry see entry or exit?

There will be entry into the industry. This is because the percentage of return which is 11% is greater than the normal rate of profit which is 5%.

d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?

The rate of return earned by firms in this industry once the industry reaches long-run equilibrium will be 5% which is the normal rate of profit in the economy.

4 0
3 years ago
Wen, a consumer researcher, is conducting a research on the buying behavior of the Hispanics. As part of her study, she calculat
kozerog [31]

Answer:

<u>demographics.</u>

Explanation:

Demographic attributes <u>refer to the particular characteristics common to a particular regional population</u>. In a demographic survey factors such as gender, race, age and income are analyzed.

Demographic data help to understand peculiar characteristics of a given population, through the data it is possible to understand if the individual characteristics of a participant are relevant to configure as a representative sample of the population, in order to assist in the generalization and development of policies and research. Market

4 0
3 years ago
To what degree a country's legal system is based on the rule of law matters little in international business.
marissa [1.9K]

Rule of law is very important in case of country’s legal system

This means that no one can be regarded to be above the law in a society where the rule of law exists. In a parliamentary democracy, the rule of law places a duty on all citizens to uphold the law, and in order to do so, the legislation must be just and not arbitrary. The goal of the rule of law, like other constitutional concepts, is to advance peoples' freedom and basic rights.

People and corporations must abide by the regulations set forth by the rule of law in order to avoid penalties. The rule of law establishes norms for businesses so that they, too, know what is required of them in their transactions and enables people to comprehend what is expected of them in their personal capacities.

Learn more about rule of law at

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3 0
1 year ago
You receive $100 today, $200 in one year, and $300 in two years. if you deposit these cash flows into an account earning 10 perc
lbvjy [14]

Answer:

$628.49

Explanation:

Cash flows                     Discount factor      Future value

$100                         1.1449                $114.49

$200                         1.07                   $214

$300                          1                        $300

Future value                                                  $628.49

The discount factor is as follows

= (1 + interest rate)^number of years

For $100 the year is 2

For $200 the year is 1

For $300 the year is 0

5 0
2 years ago
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