Answer:
Dividend growth rate anticipated = 14.66%
Explanation:
Using dividend growth model we have
P =
Where P = Current market price = $120
D = Dividend to be paid at year end or next year = $1.37
K = Expected return on equity = 15.8%
g = Expected growth rate
Now putting values we have
$120 =
0.158 - g =
0.158 - 0.0114 = g
0.1466 = g = 14.66%
Answer:
Ending Balance Due = $14,980.106
Total Interest = $780.106
Explanation:
solution
Total Interest and Ending balance due by the U.S. Rule are as given below
so interest is here for 70 day with 12 % of 21000
interest = 0.12 × 21000 ×
interest = $490
so
payment = $2400 - $490
payment = $1,910
and adjusted balance will be after that
adjusted balance = $21,000 - $1,910
adjusted balance = $19,090
and
on 100 day
Interest = 0.12 × $19,090 ×
Interest = $190.9
and
Payment = $4,400 - $190.9
payment = $4209.1
So
adjusted balance = $19090 - $4209.1
adjusted balance = $14,880.9
and interest = $14,880.9 × 0.12 ×
interest = $99.206
so Ending Balance Due will be
Ending Balance Due = $14,880.9 + $99.206
Ending Balance Due = $14,980.106
and
Total Interest = $490 + $190.9 + $99.206
Total Interest = $780.106