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dybincka [34]
3 years ago
7

Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 25 percent for the next three years, with the gro

wth rate falling off to a constant 4.5 percent thereafter. If the required return is 10.5 percent and the company just paid a dividend of $2.85, what is the current share price?
Business
1 answer:
mel-nik [20]3 years ago
3 0

Answer:

The current share price is $82.85

Explanation:

D1 = (2.85*1.25)

    = 3.56

D2 = (3.56*1.25)

     = 4.45

D3 = (4.45*1.25)

     = 5.566

Value after year 3 = (D3*Growth rate)/(Required rate - Growth rate)

                              = (5.566*1.045)/(0.105 - 0.045)

                               = $96.95  

current price = Future dividend and value*Present value of discounting factor  

= 3.56/1.105 + 4.45/1.105^2 +5.566/1.105^3 + $96.95/1.105^3

= $82.85

Therefore, The current share price is $82.85

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Searls Corporation, a merchandising company, reported the following results for July: Number of units sold 2,700 units Selling p
melisa1 [442]

Answer:

$534,600

Explanation:

<em>Contribution margin = Sales - Variable Costs</em>

where :

Sales = 2,700 units x $664 = $1,792,800

Variable Costs = Costs of Goods Sold + Variable Selling Costs + Variable Administrative Cots

                        = 2,700 units x $405 + 2,700 units x $48 + 2,700 units x $13

                        = $1,258,200

therefore,

Contribution margin = $1,792,800 - $1,258,200 = $534,600

6 0
3 years ago
In the mainstream view, one major source of instability in the macro economy is the volatility of:__________
Nastasia [14]

In the mainstream view, one major source of instability in the macro economy is the volatility of <u>investment spending.</u>

<u />

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5 0
1 year ago
Ram said to me "Dont stand up" .(into indirect speech)​
kupik [55]

ram.asked me not to stand

4 0
3 years ago
Read 2 more answers
Assume the firms operating in an oligopolistic market experience a relatively small change in marginal costs. According to the k
leonid [27]

Answer:

B) Leave the equilibrium price unchanged.

Explanation:

Oligopolistic market is the arrangement where few companies offer same product to the customers. There is very less competition in the market so every supplier has fair chance for operating their business successfully. The kinked demand model curve in oligopolistic market would leave the equilibrium price unchanged.

3 0
3 years ago
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Lady bird [3.3K]

Answer:

B. narrow, have been unemployed for 15 weeks or more weeks.

Explanation:

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I. Natural Rate of Unemployment (NU).

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