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Aliun [14]
3 years ago
6

A stock will pay no dividends for the next 3 years. Four years from now, the stock is expected to pay its first dividend in the

amount of $2.4. It is expected to pay a dividend of $3 exactly five years from now. The dividend is expected to grow at a rate of 5% per year forever after that point. The required return on the stock is 14%. The stock's estimated price per share exactly TWO years from now, P2 , should be $______.
Business
1 answer:
vesna_86 [32]3 years ago
8 0

Answer:

$24.59 or $24.6 or $25

Explanation:

Value of the share is the present value of dividend associated with that share. We need to calculate the present value of each dividend at year 2 and add them to determine the value of the share.

As given there is no dividend for 3 years,next dividend of $2.4 dividend will be discounted for two years and $3 dividend for three years. After that we need to calculate the  present value using DVM and discount this value for 4 years.

Value of Stock = [ $2.4 (1+14%)^-2 ] + [ $3 (1+14%)^-3 ] + [ $3(1+5%) / (14%-5%) ] x (1+14%)^-4

Value of Stock = $1.85 + $2.02 + $20.72 = $24.59

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aleksandrvk [35]

<u>Mutual funds</u> investment works by taking investors’ money, investing that collective money in stocks, bonds, and other investments, and managing this portfolio for the investors.

<h3><u /></h3><h3><u>A Mutual Fund is what?</u></h3>

A mutual fund is a type of financial vehicle that combines shareholder funds to invest in securities such as stocks, bonds, money market instruments, and other assets. Professional money managers run mutual funds, allocating the assets and aiming to increase investors' capital gains or income.

<u>Can Shares in Mutual Funds Be Sold Anytime?</u>

Shares in mutual funds are regarded as liquid assets and may be sold at any time; nevertheless, you should carefully review the fund's exchange and redemption fee regulations. Capital gains from mutual fund redemptions may also have tax repercussions.

Learn more about mutual funds with the help of the given link:

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7 0
1 year ago
How are delivery drivers able to meet the delivery timelines selected by customers when purchasing products?.
Sliva [168]

Delivery drivers are able to meet the delivery timelines selected by customers when purchasing products by using : A GPS to avoid traffic delays.

<h3>What is product delivery?</h3>

Product delivery refers to the process of moving goods and services from one place to another. This process entails getting the goods produced either to a place where they will be sold or to final consumers.

The use of GPS enable us delivery drivers avoid traffic delays by informing them ahead where there are traffic.

Hence, delivery drivers are able to meet the delivery timelines selected by customers when purchasing products by using a GPS to avoid traffic delays.

Learn more about delivery here : brainly.com/question/24553900

5 0
1 year ago
Soriano Company had net sales of $300,000 for the month (after returns and allowances of $1,500 and sales discounts of $3,250).
Yanka [14]

Answer:

Ending Inventory  $ 64,000

Explanation:

To define the final inventory of the company it's necessary to find the cost of good of the period.  

As the company had a 43% of gross profit, it means that for every dollar of sales we have 0,43 dollar of Gross Profit, with this value is possible to know the total cost of the goods sold during the period, that it's the difference between Sales Revenue and Gross Profit.  

Total Sales Revenue had to be the net value after returns and discounts as it's detailed.  

Income Statement  

Sales revenue        $ 300,000  

Cost of goods sold  -$ 171,000  

Gross Profit            $ 129,000 43%

Beginning Inventory  $ 60,000

Purchases                  $ 175,000

Cost of goods sold  -$ 171,000

Ending Inventory    $ 64,000

7 0
3 years ago
You have planned purchases of $2,500. you have received orders that total $1,200, and you have ordered merchandise that totals $
laiz [17]
How to calculate Open-to-buy:
Open-to-buy = planned purchases - (orders received + merchandise ordered)

Planned purchases = $2,500
Received orders = $1,200
Ordered merchandise = $700

Open-to-buy = $2,500 - ($1,200 + $700)
Open-to-buy = $2,500 - $1,900
Open-to-buy = $600
3 0
3 years ago
Engineer Brown has been engaged in providing consulting engineering services for a number of years as a sole proprietor. Because
frez [133]

Answer:

Engineer Brown has been engaged in providing consulting engineering services for a number of years as a sole proprietor. Because his practice was growing, he recently hired another engineer and decided to commence offering professional services under the name of Brown and Associates. In order to comply with the rules he must

Notify the Board office of the name change

Explanation:

Since it is the same company but just with change of name changes, notification to the company he render services for is only needed to avoid confusion about the authenticity of the company

7 0
3 years ago
Read 2 more answers
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