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
poizon [28]
3 years ago
6

Nu-Tech is expecting a period of intense growth and has decided to reduce its annual dividend by 10 percent a year for the next

two years. After that, it will maintain a constant dividend of $.70 a share. Last year, the company paid $1.80 per share. What is the value of this stock if the required rate of return is 13 percent?A. $7.62B. $6.99C. $6.79D. $8.87E. $8.22
Business
1 answer:
lana [24]3 years ago
4 0

Answer:

The answer is C. That is, Value of the stock is $6.79.

Explanation:

Please find the below for detailed explanations and calculations:

We have the dividend stream given as below:

Y1 = 1.80 x 0.90 = $1.62;

Y2 = 1.62 x 0.90 = $1.458;

Constant dividend from Y3 of $0.70.

The value of this stock is equal to the total present value of the above expected dividend stream from the stock which is discounted at the required rate of return 13%:

=> Value of stock = (1.62/1.13) + (1.458/1.13^2) + [ ( 0.7/ 0.13) / 1.13^2] = $6.79.

You might be interested in
Which area of study involves microeconomics?
Mazyrski [523]

Answer:

The science of microeconomics covers a variety of specialized areas of study including: Industrial Organization: the entry and exit of firms, innovation, and the role of trademarks. Labor Economics: wages, employment, and labor market dynamics.

Explanation:

5 0
3 years ago
Read 2 more answers
Stephanie Corporation sells a single product. Budgeted sales for the year are anticipated to be 639,000 units, estimated beginni
Margarita [4]

Answer:

dollar value=$114452

Explanation:

We need to calculate the dollar value of material A needed during this year.

First step is to calculate how many units are necessary

Budgeted Sales= 639000 units

Ending inventory=82000 units

Beginning  Inventory= 101000 units

Production of the year= 620000 (639000+82000-101000)

Second step is to calculate how much of material A is required

620000 units*0,50lb/un= 310000lb

Finally, we need to convert lb to pounds/$

1lb=0,71 punds

310000lb*0,71=220100pounds

dollar value=220100*$0,52=114452

3 0
3 years ago
The additional dining space will occupy space next to Olaf’s that was recently rented to a tenant. By claiming the space for the
Illusion [34]

Answer:

$12,146

Explanation:

The computation of present value of this opportunity cost is shown below:-

Net After tax Operating Profit Per month = Rent space per month × Profit margin on the renting the space percentage

= $1,000 × 30%

= $300

Project is for 4 Years

Total months = 4 × 12

= 48 Months

Interest Rate Per month = 9% ÷ 12

= 0.75%

As per the question the Rent is Received at the start of the month

So Present Value of this opportunity cost = $300 (1 + PVAF (0.75%,47))

= $300 × ( 1 + 39.486)

= $12,145.85

= $12,146

3 0
3 years ago
Novak’s Market recorded the following events involving a recent purchase of inventory: Received goods for $112000, terms 2/11, n
Arte-miy333 [17]

Answer:

Option (C) is correct

Explanation:

The payment is made during the discount period of 11 days so the 2% discount rate would be applicable.

Goods purchased =   $112,000

Goods returned = $2,200

Discount =   (Goods purchased - goods returned) × 2%

               = ($112,000 - $2,200) × 2%

               = $2,196

Net purchase = Goods purchased - returned - Discount

                       = $112,000 - $2,200 - $2,196

                       = $107,604

Total inventory cost = Net purchase + Freight cost

                                 = $107,604 + $400

                                 = $108,004

Therefore, company’s inventory increased by $108,004.

5 0
3 years ago
Text written for advertising and marketing campaigns is referred to as o content. context O copy o collateral​
melisa1 [442]

Answer:

always be it and never fail

Explanation:

5 0
2 years ago
Other questions:
  • When applying the lower of cost or market rule to inventory valuation, market generally means?
    6·1 answer
  • Determine the missing amount for each of the following:
    15·1 answer
  • In what FBLA region is Arkansas included​
    6·1 answer
  • The Sugar Sweet Company will choose from two companies to transport its sugar to market. The first company charges $3995 to rent
    12·1 answer
  • The difference between a job shadow and an internship is what?
    11·2 answers
  • The demand for cable television is relatively elastic, because if the price gets too high, people will rent dvds or videos inste
    5·2 answers
  • The president of Deal Corporation wrote to Boyd, offering to sell the Deal factory for $300,000. The offer was sent by Deal on J
    11·1 answer
  • Masks Inc. is a cosmetics company that makes beauty products. It uses whale oil from dead whales only and does not kill whales t
    7·1 answer
  • . According to results by Seyhun, __________.A. investors cannot usually earn abnormal returns by following inside trades after
    9·1 answer
  • The main goals of an engineering ethics class if to memorize the professional codes of ethics as formulated by professional orga
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!