Answer:
$69.47
Explanation:
D1 = ($1.45*1.20) = $1.7
D2 = ($1.7*1.20) = $2.04
D3 = ($2.04*1.20) = $2.45
Value after year 3 = (D3*Growth Rate) / (Required rate-Growth Rate)
Value after year 3 = ($2.45*1.08) / 0.11-0.08
Value after year 3 = $2.646 / 0.03
Value after year 3 = $88.20
Current share price = Future dividend and value*Present value of discounting factor(rate%,time)
Current share price = $1.7/1.11 + $2.04/(1.11)^2 + $2.45/(1.11)^3 + $88.20/(1.11)^3
Current share price = $1.5315315 + $1.65571 + $1.7914189 + $64.49107
Current share price = $69.4697304
Current share price = $69.47
Answer: a. U.S. Treasuries with 1 year to maturity
Explanation:
The Government guaranteed the price of the carbon and the payoff is to be one year later.
The opportunity cost will therefore be a similar Government security to the payoff term of the carbon sale which is 1 year.
The Government security with a similar payoff term is the US Treasury bill with 1 year left till maturity and this will be the opportunity cost because instead of the Government issuing and paying out that security they will instead pay for the carbon.
Answer:
$16,800
Explanation:
The amount of the note payable as the current position of long term notes payable on the balance sheet as of December 31, 2016 can be calculated by just dividing the principal amount by the number of periods it has been borrowed for
Calculation: 84000/5 = $16,800
Answer:
a) $3077
b) The owner should make this investment because the marginal benefit is greater than the marginal cost
Explanation:
Given data :
Total cost = $2000
depreciation rate = 8% per year
expected increase in revenue (CF ) = $400
interest rate = 5%
a) Determine the present value of the stream of revenue due to the upgrades
= CF / ( 1 + r ) ^t where ( 1 + r )^t = 13%
= 400 / 13%
= $3077
b) The owner should make this investment because the marginal benefit is greater than the marginal cost
