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Usimov [2.4K]
3 years ago
6

You expect KT industries​ (KTI) will have earnings per share of $ 6 this year and expect that they will pay out $ 2.25 of these

earnings to shareholders in the form of a dividend. ​ KTI's return on new investments is 13​% and their equity cost of capital is 15​%. The value of a share of​ KTI's stock is closest​ to:
Business
1 answer:
snow_lady [41]3 years ago
7 0

Answer:

Value of a share = $15

Explanation:

<em>According to the </em><u><em>dividend valuation model</em></u><em>, the value of a share is the present value of expected dividend discounted at the required rate of return. </em>

This model is expressed in the formula below;

Value of a share = D/Ke

D- dividend payable in year one

Ke- cost of equity

Value of a share = 2.25/0.15

Value of a share = $15

Value of a share = $15

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Actor Sissy Spacek once objected to a series of movie scenes that included her smoking a certain brand of cigarettes. She was pr
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3 years ago
To adjust for rent used up during the year that was recorded to the prepaid rent account when paid for, Multiple choice question
EleoNora [17]

To adjust for rent used up during the year that was recorded to the prepaid rent account when paid for;

  • Rent expense is debited, prepaid rent is credited

<h3>Prepaid rent account</h3>

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On this note, the amount reported on the balance sheet is the amount that has not yet been used or expired as of the balance sheet date.

Read more on prepaid rent account;

brainly.com/question/1202504

6 0
2 years ago
BK Books is an online book retailer that also has 10,000 "bricks and mortar" outlets worldwide. You are a risk-neutral manager w
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Answer: Therefore, we should make her an offer at that salary

Explanation:

Based on the information given in the question,

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3 years ago
If you were using the discounted cash flow method to determine the appropriate value of a security, you would want to purchase t
saul85 [17]

Answer: The current market price is below the PV

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The discounted cash flow method is when the time value of money is being used to value a project, security, company, or an asset.

When the discounted cash flow method is used to determine the appropriate value of a security, it is vital to buy the security when the current market price is below the present value.

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