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m_a_m_a [10]
3 years ago
9

Gilmore, Inc., just paid a dividend of $3.05 per share on its stock. The dividends are expected to grow at a constant rate of 5.

5 percent per year, indefinitely. Assume investors require a return of 10 percent on this stock. What is the current price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.).What will the price be in five years and in fourteen years?
Business
1 answer:
Alona [7]3 years ago
7 0

Answer:

intrinsic value: 49.50

value in four years:        $   61.32

value in fourteen years: $ 104.75

Explanation:

we solve using the gordon model:

\frac{divends_1}{return-growth} = Intrinsic \: Value

D0 =  3.05

D1 = 3.05 x ( 1 + 0.055) = 3.21775‬

\frac{3.21775}{0.12 - 0.055} = Intrinsic \: Value

Value: 49.50384615

<u>In the future will grow at the same rate as dividends:</u>

price in four years:         49.50 x (1.055)^4  =  61.32182021

price in fourteen years: 49.50 x (1.055)^14 = 104.7465274

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3 years ago
On May 10, 2020, Splish Co. enters into a contract to deliver a product to Greig Inc. on June 15, 2020. Greig agrees to pay the
Amiraneli [1.4K]

Answer:

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Preparation of the journal entries for Splish related to this contract.

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4 0
2 years ago
Artists often use ____________ to create small and intimate works because the paints are easy to carry and only require a glass
Mazyrski [523]
Artists often use WATERCOLORS to create small and intimate works because the paints are easy to carry and only requires a glass of water. Watercolor is made up of pigment in a vehicle of water and gum Arabic, which is a sticky plant substance that acts as the binder. The most common support for watercolor is paper. Watercolors could readily be taken on outdoor sketching expeditions and are particularly preferred by amateur artists.<span />
4 0
4 years ago
Match each term below with the description that fits it best. 1. Treasury stock 2. Issued capital stock 3. Outstanding capital s
saw5 [17]

Answer:

1) shares held by the issuer that is shares of Firm A held by Firm A

2) the amount of shares issued by the firm

3) the amount of shares which are circulating in the market (issued less treasury stock)

4) is the amount the governement angency in charge of regulations approved the firm to issue It cannot surpass this ammount without their permission being granted

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Explanation:

DISCLAMER:

As the options aren't given I define each concept

3 0
3 years ago
Although there are some clear disadvantages associated with extending credit to customers, such as bad debt costs, most managers
WITCHER [35]

Answer:

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Explanation:

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