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Galina-37 [17]
2 years ago
11

General Importers announced today that its next annual dividend will be $2.60 per share. After that dividend is paid, the compan

y expects to encounter some financial difficulties and is going to suspend dividends for 5 years. Following the suspension period, the company expects to pay a constant annual dividend of $1.30 per share. What is the current value of this stock if the required return is 18 percent?
Business
1 answer:
maks197457 [2]2 years ago
4 0

Answer:

Price = $4.88

Explanation:

First, find the dividend per year;

D1 = 2.60

D2= 0

D3= 0

D4= 0

D5= 0

D6= 0

D7 (Onwards) = 1.30

Next, find the PV of each dividend given a rate of 18%

PV (D1) =2.60/(1.18) = 2.2034

PV (D1 to D6) = 0

PV (D7 onwards ) = \frac{\frac{ 1.30}{0.18} }{1.18^{6} } = 2.6753

Price = 2.2034 + 2.6753

Price = $4.88

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A document that purports to be an agreement but does not include all necessary terms is known as a void contract. Therefore, choice 3 is right.

<h3>What do you mean by a contract?</h3>

A contract is defined as a commitment to do something between two or more parties. A loan arrangement between automobile purchasers and sellers is an illustration of a contract.

An arrangement between two persons to get married is an example of a contract.

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3 0
2 years ago
A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could us
Sergio [31]

Answer:

For both 10,000 units and 20,000 units, the best alternative is Vendor B

Explanation:

Using the information provided in the question, we can write the following:

Annual Volume of 10,000 units

Internal Alternative 1

Variable costs = 170,000 (we multiply the variable cost per unit by total units)

Fixed costs = 20,000

Total costs = 370,000

Internal Alternative 2

Variable costs = 140,000

Fixed costs = 240,000

Total costs = 380,000

Vendor A

Total cost = 200,000 (we simply multiply the price by the quantity)

Vendor B

Total cost = 180,000

Vendor C

Total cost = 190,000

The cheapest option is Vendor B

Now for the 20,000 units:

Internal Alternative 1

Variable costs = 340,000

Fixed costs = 200,000

Total costs = 540,000

Internal Alternative 2

Variable costs = 280,000

Fixed costs = 240,000

Total costs = 520,000

Vendor A

Total cost = 400,000

Vendor B

Total cost = 360,000

Vendor C

Total cost = 380,000

Therefore, Vendor B is once again, the cheapest alternative.

5 0
3 years ago
Which part of real GDP fluctuates most over the course of the business cycle?
ozzi

Answer:

c. investment expenditures

Explanation:

The reason for this is that during business cycles investors gain trust in the economy during a boom and invest a lot and during a recession they lose trust in the economy and decrease their investment by a lot, where as a lot of consumption like food, medicine, petrol etc remains mostly unaffected by changes in business cycle. Also government spending does not fluctuate a lot during the course of a business cycle because government spending is either long term like development projects.

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When Patrick was talking with his customer about the new accounting system, his customer mentioned that she thought the new syst
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Answer:

E. overcoming reservations

Explanation:

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2 years ago
The per-unit standards for direct materials are 2 gallons at $4 per gallon. Last month, 12200 gallons of direct materials that a
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Answer:

$8,800 favourable

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