1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
valkas [14]
4 years ago
5

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 20 percent for the next three years, with the growth

rate falling off to a constant 8 percent thereafter. If the required return is 11 percent, and the company just paid a dividend of $1.45, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
user100 [1]4 years ago
7 0

Answer:

The  current share price is $71.05

Explanation:

P3 = D3(1 + g)/(R – g)

    = D0[(1 + g1)^3](1 + g2)/(R – g)

    = [$1.45*(1.20)^3(1.08)]/(0.11 – 0.08)  

    = $90.20

The price of the stock today is the PV of the first three dividends, plus the PV of the Year 3 stock price given by:  

P0 = $1.45(1.20)/1.11 + $1.45[(1.20)^2]/1.112 + $1.45[(1.20)^3]/1.113 + $90.20/1.113

    = 1.568 + 1.695 + 1.832 + 65.958

    = $71.05

Therefore, The  current share price is $71.05

You might be interested in
LO 3.2A company sells its products for $80 per unit and has per-unit variable costs of $30. What is the contribution margin per
slavikrds [6]

Answer:

$50

Explanation:

The contribution margin per unit of any company's product  can be calculated using the following formula:

Contribution margin per unit=Sale price per unit- Variable cost per unit

In this question

Sale price per unit=$80

Variable cost per unit=$30

Contribution margin per unit=80-30

                                            =$50

8 0
4 years ago
Joe runs a restaurant. He pays his employees​ $200,000 per year. His ingredients cost him​ $50,000 per year. Prior to running hi
Elanso [62]

Answer:

Cost incurred while running a restaurant:

Salary paid = $200,000 per year

Ingredients cost =  $50,000 per year

Before running this restaurant, he was earning $150000 per year.

Here, we are using a concept called opportunity cost.

Opportunity cost refers to the benefit of a commodity that is forgone to produce one extra unit of some other commodity.

It is also refers to the value of next best alternative that is given up by choosing some other alternative.

In this question, opportunity cost of running a restaurant is the income that is earned when he was a lawyer, i.e, $1,50,000 per year. This is the income that is foregone when he started running a restaurant.

3 0
3 years ago
Firefly Inc. sold land for $225,000 cash. The land had been purchased five years earlier for $275,000. The loss on the sale was
baherus [9]

Answer:

It will report 225,000

Explanation:

In the cash flow statment we focus on the cash received or used during the year. This is regardless of the gain or loss. When it was adquire the cash flow show use of cash for 75,000. Now, the land is sold. The company receive 225,000 cash. This amount is posted in the cash flow statement, as cash generated for investing activities.

<u>Resuming:</u>

On cash flow, you have to follow the money, not the gain or loss. If there is no cash receipt or disbursement, then you will not post anything.

8 0
3 years ago
What was the purpose of the national bank according to hamilton?
Tamiku [17]
Hamilton believed the National Bank would help stabilize the economy. It would create a place where the government could safely deposit money, and the bank would also be able to make loans to the government and businesses. Thus businesses could be started, and when the businesses are successfully running it would increase the money earned by both the individual people and the government. People would be willing to spend more on goods, allowing others to make bigger profits and also be willing to spend more basically he thought it was constitutional
3 0
3 years ago
If a Keynesian expenditure-output model shows that aggregate demand for both goods and labor has shifted to the left to D1, whil
Dennis_Churaev [7]

Answer:

A. excess supply

Explanation:

The Keynesian expenditure-output model focuses on the total amount of spending in the economy, with no explicit mention of aggregate supply or of the price level. According to my research on this type of model, I can say that based on the information provided within the question the result of these values would lead to an excess amount of supply.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

4 0
3 years ago
Other questions:
  • On January 1, Big Company acquires all of the common stock of Little Company by issuing 400,000 shares of $1 par value stock wit
    12·1 answer
  • Which of the following generally provides the least evidence regarding the valuation of accounts receivable?A. Reviewing an agin
    5·1 answer
  • ​(Loan amortization​) Mr. Bill S.​ Preston, Esq., purchased a new house for ​$170,000. He paid ​$25,000 down and agreed to pay t
    15·1 answer
  • When can the government restrict information released by the press?the government can never restrict information released by the
    5·2 answers
  • A person wishes to convey any and all interests in a property to another without making any assurances as to encumbrances, liens
    7·1 answer
  • Babinski prepared and duly executed a living will in which he gave explicit instructions not to be resuscitated in the event he
    6·1 answer
  • Trapp Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in its
    5·1 answer
  • Martha, an accrual-method taxpayer, has an accounting practice. In 2015, she performs tax analyses for Arnold and sends him an i
    10·1 answer
  • Which of these will most likely have a positive effect on your lifestyle?
    8·1 answer
  • Your company decides not to implement security procedures because employees refuse to comply anyway. this is an example of risk
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!