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
ki77a [65]
3 years ago
12

ABC common stock just paid a dividend of $2.50 per share. The ABC dividend is expected to grow 20% per year for two years, and t

hen the growth rate will settle into a constant 6%. If the discount rate is 15% on ABC common stock, what should be the current share price
Business
1 answer:
Liula [17]3 years ago
6 0

Answer and Explanation:

Given that the dividend will grow at 20% for two years and then a constant 6% at third year

1st year dividend at 20%= $3

Present value of the dividend for the first year=PV factor at 15%(from table) = $2.61

2nd year dividend at 20% = $3.60

Present value of the dividend for the second year = PV factor at 15%(from table) $2.72

3rd year dividend at 6% growth rate =

$42.40

Present value of the dividend for the third year = PV factor at 15% = $32.06

Current price of the stock =$2.61+$2.72+$32.06

=$37.39

You might be interested in
What role do values play in making ethical decisions?
Lubov Fominskaja [6]

Values play a central role in ethical decision making.It is because core values are so subjective, they will be relative to the individual who holds them. Not all individuals have the same core values and conflicts about them will often arise.

7 0
3 years ago
Five days after signing a contract to purchase a new timeshare in North Carolina, the buyer cancels the timeshare contract. Acco
dangina [55]

Answer:

Under north Carolina's laws, the developer must refund the buyer's money within a 30 day period since the purchase date. North Carolina law also sets a deadline of 5 calendar days to cancel a timeshare contract, so this buyer barely made it on time. A buyer cannot waive his right to cancellation, even if the option is not included in the contract.

6 0
3 years ago
In 1924, the famous novelist F. Scott Fitzgerald wrote an article for the Saturday Evening Post entitled ?How to live on $36,000
Maksim231197 [3]

Answer:

$4,267,059

Explanation:

to determine the equivalent amount of money between 1924 and 2008, we must divide the 2008 CPI by the 1924 CPI, and then multiply by $36,000:

= (2015 / 17) x $36,000 = 118.53 x $36,000 = $4,267,059

The consumer price index measures the weighted price of basket of goods . It is useful for calculating inflation and comparing how the purchasing value of the US dollar has decreased in time. Basically what this shows us, is that $1 in 1924 would purchase the same amount of goods as $118.53 in 2008.

8 0
3 years ago
The budget for making the movie The Twilight Saga: New Moon was one-fifth the budget for making Harry Potter: The Half Blood Pri
sergey [27]

Answer:

The budget for The Twilight Saga: New Moon = $50 million

Explanation:

Let the budget for Twilight Saga: New Moon = T

Let the budget for Harry Potter: The Half Blood Prince = H

We are given the following:

T=\frac{1}{5}H (The budget for Twilight Saga is one-fifth the budget for Harry Potter)

Cross multiplying the equation

5T = H  - - - - (1)

H + T = 300,000,000 - - - - - (2) (Together the budgets totaled $300 million)

Next, let us substitute the value of H in equation (2) with equation (1)

(5T) + T = 300,000,000

6T = 300,000,000

T = \frac{300,000,000}{6} \\T = 50,000,000

Therefore, the budget for The Twilight Saga: New moon = $50,000,000

And the budget for Harry Potter: The Half Blood Prince = $250,000,000

8 0
3 years ago
In 2007, Gillette saw an opportunity to capture the market of 500 million Indians who used double edge razors with no protection
rusak2 [61]

Answer:

Gillette in India

The failure of the Vector was caused by the fact that Indian men have longer and thicker hair, which the lack of earlier research in the targeted demographic segment did not discover.

Explanation:

Since Indian men have longer and thicker hair than the local consumers of Gillette's razor products in America, an earlier research would have uncovered the fact.  Thereafter, the discovery would have been incorporated into the design and production of Vector for the Indian market. No wonder, with its Mach 3 Turbo razor, Gillette overcame its initial inertia and handicap and made a success of the razor business in India.

5 0
3 years ago
Other questions:
  • Katy, a manager, is evaluating her team members by rating them from best to worst. This rating is based on their overall perform
    9·1 answer
  • On January 1, Year 1, Weller Company issued bonds with a $260,000 face value, a stated rate of interest of 10.00%, and a 10-year
    14·1 answer
  • If the marginal propensity to consume (MPC) is 0.75, and if the goal is to increase real GDP by $400 million, then by how much w
    5·1 answer
  • Which of the following changes would bring the U.S. capital stock, currently below the Golden Rule level, closer to the steady-s
    8·1 answer
  • Charlene has a monthly salary of $3,410. With her present budget, Charlene has a net income that is 7% of her monthly salary. Ch
    5·1 answer
  • Sheffield Corp. sold some of its plant assets during 2021. The original cost of the plant assets was $904000 and the accumulated
    15·1 answer
  • Homer notices that he gains more weight if he eats more doughnuts. Fill in the blanks to com the passage about the correlation b
    9·1 answer
  • Which of these statements is true?
    15·1 answer
  • Which of the following is least likely to be a theme in a novel about young people going to war?
    5·1 answer
  • *Improper Answers = BAN*
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!