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Aleksandr-060686 [28]
3 years ago
5

The firm projects a rapid growth of 40 percent for the next two years and then a growth rate of 20 percent for the following two

years. After that, the firm expects a constant-growth rate of 8 percent. The firm expects to pay its first dividend of $1.25 a year from now. If your required rate of return on such stocks is 20 percent, what is the current price of the stock
Business
1 answer:
il63 [147K]3 years ago
7 0

Answer:

The price of the stock today is $15.63

Explanation:

The three stage Dividend Discount model will be used to calculate the price of this stock as the dividends are growing at three different growth rates. These dividends will be discounted back to calculate the price of the stock today.

The price per share today under this model will be:

P0 = D1 / (1+r) + D2 / (1+r)^2 + ... + Dn / (1+r)^n + [Dn * (1+gC) / (r - gC)] / (1+r)^n

Where,

  • D1 is the dividend expected for the next period of Year 1.
  • gC is the constant growth rate or third stage growth rate that will last forever.

P0 = 1.25 / (1+0.2)  +  1.25 * (1+0.4) / (1+0.2)^2  +  1.25 * (1+0.4) * (1+0.2) / (1+0.2)^3  +  1.25 * (1+0.4) * (1+0.2)^2  /  (1+0.2)^4  +  

[1.25 * (1+0.4) * (1+0.2)^2 * (1+0.08)  /  (0.2 - 0.08)]  /  (1+0.2)^4

The P0 = $15.625 rounded off to $15.63

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This technique is an iterative process that identifies and defines the work to be completely accomplished in the near term, and
kiruha [24]

Answer:

The correct answer is: Rolling wave planning

Explanation:

Rolling Wave Planning refers to the technique or process of project planning or management in waves. This technique involves iterative planning with the progression of the project. It is used in case of a tight or strict schedule that has to be followed.

The planning of the work to be completed in near term, involves setting high level assumptions and milestones.

6 0
3 years ago
abbie is an unmarried individual who earned a gross income of $74827 last year. she make $3839.31 in ira contributions, donated
musickatia [10]
42,750 = gross income standard deduction reduces your taxable income - 5700.00 exemption acts like a tax deduction, reducing taxable income - 3650.00 IRA contributions are tax deductible - 537.56 donating to charity is tax deductible - 918 mortgage interest payments are tax deductible - 1351.35 income NOT taxable - 5700 + 3650 + 537.56 + 918 + 1351.35 = 12,156.91. 42,750.00 - 12,156.91 = 30,593.09 <---taxable income I think I did this correctly, but just in case, you might want to get a second opinion :)
8 0
3 years ago
If the federal reserve banks mailed everyone in the United States a new $1000.00 bill, what would happen to prices, output, and
Artemon [7]

If the Fed mailed everyone a $1,000, the effect would be a <u>rise in prices, </u>output, and income.

<h3 /><h3>What happens when money is injected into the economy?</h3>

The Equation of exchange is:

<em>Money supply x Velocity of money = Price level x Quantity of goods and services produced </em>

If the Money supply increases like it will when $1,000 is sent by the Fed to people, the velocity will also rise as people purchase more goods and services.

The Price level and the Quantity produced on the right side of the equation would also have to rise to match the left side. So prices would rise, and so would output.

Find out more on the equation of exchange at brainly.com/question/10110078.

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4 0
1 year ago
In year 1, nominal GDP for the United States was $2,250 billion and in year 2 it was $2,508 billion. The GDP deflator was 72 in
leonid [27]

Answer:

c. 1.6 percent.

Explanation:

GDP Deflator = Nominal GDP / Real GDP * 100

year 1

Real GDP = $2250 billion/72*100

                = $ 3125.

year 2

Real GDP = $2508 billion/79*100

                = $3175  

Real GDP rose by = Real GDP (2nd year) - Real GDP (1st year)

                              = $3175 - $3125

                              = $ 50

% increase = $50/$2,250*100

                  = 1.6%

Therefore, The Real GDP rose by 1.6%.

7 0
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The exact meaning of the signals exchanged between a sender and a receiver is called a:_________
Nastasia [14]

The exact meaning of the signals exchanged between a sender and a receiver is called as a Network protocol.

<h3>What Is a Network Protocol?</h3>

A network protocol is a set of rules that determine how data is transmitted between different devices in the same network.

Because of the Network protocols we can easily communicate with people all over the world, and thus play a critical role in modern digital communications.

Similar to the way that speaking the same language simplifies communication between two people, network protocols make it possible for devices to interact with one another because of predetermined rules built into devices’ software and hardware.

Neither local area networks (LAN) nor wide area networks (WAN) could function the way they are doing today without the use of network protocols.

To learn more about network protocol: brainly.com/question/13327017

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4 0
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