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Savatey [412]
3 years ago
15

Global Exporters recently announced that it will pay annual dividends of $1.10; $1.25, and $1.30 a share over the next three yea

rs, respectively. After that, the firm plans to increase its dividend by 2.5 percent annually. What is one share of this stock worth to you today if you require an 11 percent rate of return?

Business
2 answers:
Whitepunk [10]3 years ago
4 0

Answer:

$13.28

Explanation:

Worth of the stock is the present value of all the cash flows associated with the stock. Dividend is the only cash flow that a stock holder receives against its investment in the stocks. We need to calculate the present values of all the dividend payments.

Formula for PV of dividend

PV of Dividend = Dividend x ( 1 + r )^-n

1st year

PV of Dividend = $1.10 x ( 1 + 11% )^-1 = $0.99

2nd year

PV of Dividend = $1.25 x ( 1 + 11% )^-2 = $1.01

3rd year

PV of Dividend = $1.30 x ( 1 + 11% )^-3 = $0.95

After three years the dividend will grow at a constant rate of 2.5%, so we will use the following formula to calculate the present value

PV of Dividend = [ $1.30 x ( 1 + 2.5% ) / ( 11% - 2.5% ) ] x [ ( 1 + 11% )^-4 ]

PV of Dividend = $10.33

Value of Stock = $0.99 + $1.01 + $0.95 + $10.33 = $13.28

Paraphin [41]3 years ago
3 0

Answer:

$14.42

Explanation:

Please kindly check attachment for the step by step solution of the given problem.

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Explanation:

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2 years ago
In a command economy:_______
boyakko [2]

Answer:

Option d                      

Explanation:

Command economies also recognized as a planned economy have as their core tenet that national government administrators own or operate a business within a nation.

A command economy refers to the mechanism in which the government determines what products should be manufactured, how much should be manufactured and the value at which the products are offered for sale, rather than the free market.

Thus, from the above we can conclude that the correct option is D.

5 0
3 years ago
Winnebago Industries, Inc. is a leading manufacturer of motor homes. Suppose Winnebago reported ending inventory at August 29, 2
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Answer:

Winnebago Industries' ending inventory have been if it had used FIFO is $77,196,000

Explanation:

The computation of the ending inventory under FIFO method is shown below:

= Ending inventory under LIFO inventory method  + LIFO reserve

= $46,850,000 + $30,346,000

= $77,196,000

For determining the ending inventory under the FIFO method, we added the ending inventory under the LIFO method and LIFO reserve so that accurate value can come.

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sertanlavr [38]

Answer:

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Please help! <br><br>How can easy access to credit lead to Financial Mistakes and Bankruptcy?
zvonat [6]

Answer: over-borrowing.

Explanation:

credit cards function like this: you can "buy" a lot of things with it, including very very expensive things. this is because instead of really buying that product, you borrow money from the bank to buy it. you then have to pay it off in slower amounts of money over time until youve paid off the original cost of the product and more because the bank will most likely charge interest.

sounds great, right?

it is, until you cant afford to pay those smaller amounts of money. then, it starts to build up and if you still cant afford to pay the bank, they will begin to liquidize your physical assets (they take your stuff as payment, really anything, even your house can be taken.)

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