Answer:
The correct choice is C)
The most logical thing to do would be to calculate the value of the stock in 5 years time.
Explanation:
This speaks to ones understanding of dividend growth stock valuation models. These tools are used to establish a fair value for a stock by discounting the present value of its future dividends. A commonly used model is the constant growth dividend discount model.
The formula for the DDM, which assumes constant growth in dividends, is provided below.
P0 = D1/(r-g)
Where,
P0 = intrinsic value of stock
D1 = dividend payment one year from today
r = discount rate
g = growth rate
Identifying the correct answer entails establishing a timeline of the expected cash flows. We are given the following information:
t0 = $0
t1 = $0
t2 = $0
t3 = $0
t4 = $0
t5 = $0.20
t6 = $0.20 * 1.035
Given a rate of return, we could use the constant growth dividend discount model to establish the fair value of the firm at t5 (five years from today). Incidentally, to determine today's value, we'd discount it back another five years.
Based on the information above, we are able to prove that the answer is '5'.
Cheers!
A purchasing department may have difficulty getting a product quickly as it may not be readily available so may have to wait for it and also, there may be a problem getting a product at a reasonable price which means the purchaser would have to search elsewhere for it which could take time.
Answer:
Above the point bar
Explanation:
channelization
Straightened sections of the river channel are lined with concrete to increase the rate of flow and reduce bank collapse
Advantages of channelization
Improves rate of flow
Benefits transportation
Reduces bank collapse
