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CaHeK987 [17]
3 years ago
13

Drake Custom Cycles' common stock currently pays no dividends. The company plans to begin paying dividends beginning 3 years fro

m today. The first dividend will be $3.00, and dividends will grow at 5 percent per year thereafter. Given a required return of 15 percent, what would you pay for the stock today
Business
1 answer:
kifflom [539]3 years ago
5 0

Answer:

The maximum price that should be paid for this stock today is $20.71

Explanation:

The company will pay its first dividend in Year 3 which means the dividend of $3 is D3. Using the constant growth model of DDM we can calculate the price of this stock at year 3. We will discount back that to the present value to calculate the price of the stock today. the price at year 3 using the constant growth model will be,

P3 = D4 / r - g

P3 = 3 * (1+0.05)  /  (0.15 - 0.05)

P3 = $31.5

The maximum price that should be paid for this stock today is,

P0 = 31.5 / (1+0.15)^3

P0 = $20.71

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Babble, Inc., buys 405 blank cassette tapes per month for use in producing foreign language courseware. The ordering cost is ​$1
Natasha2012 [34]

Answer:

The appropriate solution is "764".

Explanation:

Given:

Demand per month,

D = 405

or,

  = 405\times 12

  = 4860

Ordering cost,

S = $15

Holding cost,

H = $0.25

As we know,

⇒  EOQ=\sqrt{\frac{2DS}{H} }

⇒            =\sqrt{\frac{2\times 4860\times 15}{0.25} }

⇒            =\sqrt{\frac{145800}{0.25} }

⇒            =\sqrt{583200}

⇒            =763.67

or,

⇒            =764

3 0
3 years ago
Ron Landscaping's income statement reports net income of $76,700, which includes deductions for interest expense of $12,600 and
vlabodo [156]

Its time's interest earned is = 9.968 Times.

What is times interest?

The ability of a business to make debt payments on time is gauged by the interest coverage ratio or times interest collected. EBIT or EBITDA divided by the total interest expense might be used to determine it.

Times interest = \frac{Earnings before Interest and Tax}{Interest}

Earnings before Interest and tax = Net Income + Interest + Tax

Earnings before Interest and tax = 76,700 ₊ 12,600 ₊ 36300

Earnings before Interest and tax = $1,25,600

therefore,Times intererst =  \frac{Earnings before Interest and Tax}{Interest}

Times interest = \frac{1,25,600}{12,600}

Times interest = 9.968 Times.

To know more about Times interest refer to:  brainly.com/question/14226671

#SPJ4

3 0
2 years ago
____ means that each department involved with new products has excellent linkage with relevant sectors in the external
evablogger [386]
Based on Organization Theory and Design, written by Richard Daft, boundary spanning <span>department involved with new products has excellent linkage with relevant sectors in the external environment.

The Research and Development (R& D) expands the network to associations and colleagues so they can easily understand the new trends and technology development. They can carefully study the right path on tailoring their product for their customer.
</span><span>
</span><span>Furthermore, this component also accepts feedbacks and suggestions from customers and distributors which can be helpful to the company.</span>
3 0
3 years ago
Idaho Industries Inc. is considering a project that has an initial aftertax outlay or aftertax cost of​ $450,000. The respective
lozanna [386]

Answer:

c

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

IRR can be calculated using a financial calculator

Cash flow in year 0 =  $-450,000

Cash flow each year from year 1 to 4 = $95,000

Cash flow in year 5 = $95,000 + $60,000 = $155,000

IRR = 5.62%

Idaho would reject the project because the IRR is less than the hurdle rate

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

7 0
3 years ago
8. Wayne is an insurance company's AML compliance officer. He has been asked by FinCEN to provide the agency with a copy of the
allochka39001 [22]

Based on the information given about the insurance company, the thing that Wayne should do is D. Immediately provide a copy of the company's AML policy as requested.

It should be noted that the anti laundering policy helps financial institutions in combatting money laundering.

Since the insurance company's AML compliance officer has been asked by FinCEN to provide the agency with a copy of the company's AML policy, he should immediately provide a copy of the company's AML policy as requested.

Learn more about insurance on:

brainly.com/question/25855858

3 0
3 years ago
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