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Pavlova-9 [17]
3 years ago
7

A stock is expected to pay a dividend of $0 50 at the end of the year (i.e., D1=$0.50), and it should continue to grow at a cons

tant rate of 7% a year. If its required return is 12%, what is the stock’s expected price 4 years from today?
Business
1 answer:
mr_godi [17]3 years ago
3 0

Answer:

$13.1

Explanation:

The value of the stock at the end of the 4 years from now shall be determined through following mentioned formula:

Value of stock at year 4=D5/R-G

R=required rate of return=12%

G=growth rate in dividends=7%

D5=dividend at the end of year 5, which shall be calculated as follows:

D1=$0.50

D2=$0.50*1.07=$0.535

D3=$0.535*1.07=$0.572

D4=$0.572*1.07=$0.612

D5=$0.612*1.07=$0.655

Based on the above calculations, the value of stock at the end of year 4 is given as follows:

Value of stock at year 4=$0.655/12%-7%

                                       =$13.1

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Explanation:

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employees that quit after on the job training, costs a company more $ in profit funds then any other department.

6 0
3 years ago
You are a U.S.-based treasurer with $1,000,000 to invest. The dollar-euro exchange rate is quoted as $1.50 = €1.00 and the dolla
Verdich [7]

Answer:

The correct answer is (B) Buy euro at $1.50/€, buy £ at €1.25/£, sell £ at $2/£

Explanation:

The dollar- euro exchange rate is quoted as $1.50 = €1.00

the dollar-pound exchange rate is quoted at $2.00 = £1.00

To calculate the actual cross rate we use; S(euro divided by pounds) =  S(dollar/pounds) ÷ S(dollar/euro).

Using symbols to denote this, we have S(€/£) = S($/£) / S($/€)

S(€/£) = S(2/1) ÷ S(1.50/1)

= (2 / 1.5)

= €1.33.

Consequently, from this result we now know that the euro is undervalued with respect to pounds under the cross rate being offered by the bank. This implies that you should first buy the euro, convert to pounds, and eventually convert back to dollars, this would enable you make money as an investor.

3 0
3 years ago
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National defense is a good that is nonexcludable and nonrival in consumption. Suppose that instead of national defense being pai
ElenaW [278]

Answer:

Explanation:

find the attached document below

3 0
3 years ago
True/False
Elanso [62]

<em>The answer is </em><em>FALSE.</em><em> </em>

<em>Relationship marketing is much important compared to maintaining databases of customer's information for mass marketing. A good relationship to clients can be a good promotion tool and technique compared to sending them promotional ads via email, SMS and social media sites. A word of a mouth is more powerful and personal compared to digital media. If the reputation of the company is good to some clients, then it will create good impression to other potential clients and to the people they know. If the company has a good impression, good attitude employees with good products, it will surely help to the company's revenue.</em>

5 0
3 years ago
Moe ’s Electric sales vacuum cleaners with a one-year warranty to fix any defects. For the current year, 200 vacuums have been s
vekshin1

Answer:

$900

Explanation:

Given that

Total repair up to end of year = 12

Estimated need to be repaid = 8

Average cost = $45

The computation of warranty expense for the current year is shown below:-

For computing the warranty expense for the current year first we need to find out the total repaired cost which is here below

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Therefore for computing the warranty expense for the current year we simply applied the above formula.

5 0
3 years ago
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