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Natasha2012 [34]
3 years ago
11

Suppose that a firm’s recent earnings per share and dividend per share are $2.50 and $1.50, respectively. Both are expected to

grow at 9 percent. However, the firm’s current P/E ratio of 24 seems high for this growth rate. The P/E ratio is expected to fall to 20 within five years.
Compute the dividends over the next five years.

Compute the value of this stock in five years.

Calculate the present value of these cash flows using an 11 percent discount rate.
Business
1 answer:
Elis [28]3 years ago
7 0

Answer:

D0 1.50

D1 1.60

D2 1.78

D3 1.94

D4 2.12

D5 2.31

Price of the stock after 5-year $ 77

PV $ 81.75

Explanation:

Earning per share 2.5

Dividend per share 1.5

grow ratio 9%

P/E ratio 24

within 5 year is expected to fall to 20

We solve for the dividend by multiplying the dividends by the grow rate of 9%

We solve for the earning after 5 years:

Principal \: (1+ r)^{time} = Amount

Principal 2.50

time 5.00

rate 0.09000

2.5 \: (1+ 0.09)^{5} = Amount

Amount 3.85

Then we multiply by 20 to get the value of the stock:

$ 3.85 x 20 = $ 77

We solve the horizon value:

\frac{D_1}{r-g} = PV\\\frac{D_0(1+g)}{r-g} = PV\\

\frac{1.5(1+0.09)}{0.11 - 0.09} = PV\\

PV $ 81.75

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Consider the following financial statement information for the Hop Corporation:
nexus9112 [7]

Answer:

Operating cycle = 59.29 days

Cash cycle = 26.1115 days

Explanation:

From the information given:

\text{Beginning Inventory \$16,284} \\ \\ \text{Beginning Accounts receivable 11,219} \\ \\ \text{Beginning Accounts payable 13,960} \\ \\ \text{Ending Inventory $19,108} \\ \\ \text{Ending Accounts receivable 13,973} \\ \\ \text{Ending Accounts payable 16,676} \\ \\ \text{Net sales \$219,320} \\ \\ \text{Cost of goods sold 168,420} \\ \\

\text{Ending Inventory \$19,108} \\ \\ \text{Ending Accounts receivable 13,973} \\ \\ \text{Ending Accounts payable 16,676} \\ \\ \text{Net sales \$219,320} \\ \\ \text{Cost of goods sold 168,420} \\ \\

To start with:

\text{Average inventory = } \dfrac{Beginning \ value +Ending \ value}{2} \\ \\ =\dfrac{ 16,284 + 19,108} {2} \\ \\ = \dfrac{35,392}{ 2} \\ \\ = \$17,696

\text{Average receivable }=\dfrac{ Beginning value + Ending value }{ 2} \\ \\ =\dfrac{ 11,219 + 13,973 }{2} \\ \\ =\dfrac{ 25,192 }{ 2} \\ \\= \$12,596 \\ \\

\text{Average payable }= \dfrac{Beginning \ value + Ending\  value}{  2} \\ \\ = \dfrac{13,960 + 16,676 }{2} \\ \\= \dfrac{30,636}{2} \\ \\ = \$15,313

\text{Days of inventory outstanding} = \dfrac{Average \  inventory }{ Cost  \ of  \ goods \  sold  } \times 365  \\ \\ \dfrac{= 17,686}{ 168,420} \times 365 \\ \\ = 0.105\times 365 \\ \\= 38.329 \ days

\text{Days  \ of  \ receivable \  outstanding }= \dfrac{Average  \ receivable }{ sales }\times 365 \\ \\ \dfrac{= 12,596 }{ 219,320} \times 365 \\ \\ = 0.0574 \times 365 \\ \\= 20.951 \  days

\text{Days of payable outstanding} = \dfrac{Average payable}{cost of goods sold} \times 365 \\ \\ = \dfrac{15,313 }{ 168,420} \times 365 \\ \\ = 0.0909 \times 365 \\ \\= 33.1785 days

\text{Operating Cycle = Days of inventory outstanding + Days of receivable outstanding} \\ \\ = 38.339 + 20.951 \\ \\ = 59.29 days

\text{Cash Conversion Cycle = Operating cycle - Days of payable outstanding} \\ \\ = 59.29 - 33.1785 \\ \\ = 26.1115 days \\ \\

6 0
2 years ago
Describe how hrd is linked to the overall goals and strategies of an organization
Yuki888 [10]

Raising standards and productivity, helping firms adapt to change, boosting employee morale and cutting absenteeism, improving the quality of working life, and building a learning culture are just a few benefits of HRD.

Why is HRD essential to achieving company goals?

Because it is an investment in one's employees that will ultimately result in a stronger and more productive workforce, human resources development is important. By supporting employee development, a business strengthens its resources and raises the value of its workforce.

Strategic human resource management is the process of integrating human resources with strategic goals and objectives in order to improve organizational performance and foster an environment that fosters innovation, adaptability, and competitive advantage.

To know more about human resources development

brainly.com/question/10583893

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7 0
1 year ago
PLS HELP 100 POINTS PLS HELP ME
AleksandrR [38]

Answer:

If i was shana i would save up her money for collage because first her tution into the school and if she dont like there then she screwed 2nd if she dont save her money then she don get a car an go see er fams

Explanation:

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3 years ago
Suppose that real GDP is currently $ 13.8 trillion and potential real GDP is $ 14.0 trillion, or a gap of $ 200 billion. The gov
MAXImum [283]

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

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3 years ago
At December 31, Folgeys Coffee Company reports the following results for its calendar year. Cash sales $ 918,000 Credit sales 31
Over [174]

Answer:

The journal entries are as follows:

(a) 5% of credit sales,

Bad debts expense A/c Dr. $15,900

       To Allowance for doubtful accounts   $15,900

(To record the bad debt expense)

Workings:

Uncollectibles:

= 5% × Credit sales

= 5% × $318,000

= $15,900

(b) 3% of total sales,

Bad debts expense A/c Dr. $37,080

       To Allowance for doubtful accounts   $37,080

(To record the bad debt expense)

Workings:

Uncollectibles:

= 3% × Total sales

= 3% × ($318,000 + $918,000)

= $37,080

(c) 8% of year-end accounts receivables,

Bad debts expense A/c Dr. $18,240

       To Allowance for doubtful accounts   $18,240

(To record the bad debt expense)

Workings:

Uncollectibles:

= (8% × year end accounts receivables) + Allowance for doubtful accounts balance

= (8% × $143,000) + $6,800

= $18,240

4 0
3 years ago
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