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scoray [572]
2 years ago
10

3. The last dividend paid by New Technologies was an annual dividend of $1.40 a share. Dividends for the next 3 years will be in

creased at an annual rate of 8 percent. After that, dividends are expected to increase by 3 percent each year. The discount rate is 16 percent. What is the current value of this stock
Business
1 answer:
Nookie1986 [14]2 years ago
7 0

Answer:

$12.60

Explanation:

The computation of the current value of the stock is shown below:-

= $1.40 × (1.08) ÷ 1.16 + 1.40 × (1.08)^2 ÷ (1.16)^2 + 1.40 × (1.08)^3 ÷ (1.16)^3 + 1.40 × (1.08)^3 × (1.03) ÷ (0.16 - 0.03) × (1.16)^3

= $1.3034 + $1.2136 + $1.1299 + $8.9520

= $12.60

Therefore for computing the current value of stock we simply solved the above equation.

You might be interested in
If Gross Domestic Product was $17 trillion in 2008 and $16 trillion in 2009. Which of the following actions would Congress be mo
cestrela7 [59]

Answer:

1 trillion

Explanation:

6 0
2 years ago
Shahia Company bought a building for $88,000 cash and the land on which it was located for $117,000 cash. The company paid trans
chubhunter [2.5K]

Answer:

Depreciation amount at the end of one year is $10,900

Explanation:

Land is not depreciated because land is assumed to have an unlimited useful life. Building is a long lived assest and it has limited useful lives. Therefore, building is depreciated assets.

The building acquisition cost is = Building transaction value + building transfer costs + Renovation cost

= $88,000 + $4,000 + $25,000

= $117,000

Depreciation value = The building acquisition cost - The residual value

= $117,000 - $8,000

= $109,000

Depreciation amount under the Straight-line method is calculated as below:

Yearly depreciation = \frac{Depreciation Value}{Useful life}

= \frac{109,000}{10}

= $10,900

6 0
3 years ago
The effectiveness of an advertising campaign can be measured a. only after the campaign has been carried out completely and resu
shepuryov [24]

Answer:

before, during, and after the campaign through the use of pretests, inquires and posttests.

Explanation:

Advertising campaigns can be defined as the advertisement of a product that focuses mainly on communicating a similar type of message to the potential customers. This can be achieved through different mediums inorder to create an awareness about the product.

Measurement of an effective advertising campaign is very necessary, it is used to determine how well a product will sell in the market.

The effectiveness of an advertising campaign can be evaluated by utilizing pretests, inquires and posttests to determine if the potential customers have seen the advertisement and how well they are responding to it.

3 0
3 years ago
The use of capital in the production process ______.
Ray Of Light [21]

Answer:

The correct answer is letter "D": improves efficiency, increases output, and provides for growth.

Explanation:

In general, capital refers to financial resources. Capital includes financial assets used in manufacturing, as well as the machinery and equipment businesses. Investors purchase stocks or mutual funds using capital. Companies raise capital from a bond or stock sales to fund their operations. Although capital may be cash or currency, it is not the same as money.

<em>While talking about production, capital allows firms to hire qualified personnel that improves the company's efficiency which is likely to increase production or improve the quality of the output. Eventually, both an increase in efficiency and output contributes to the growth of an institution in the form of more profits.</em>

7 0
2 years ago
Which ethical approach typically focuses on the attainment of fair and equitable distribution of economic goods and services?
SVETLANKA909090 [29]

Answer:Social justice theory

Explanation:Social justice is a concept which encourages fair and just relationship in terms of how wealth, opportunities are distributed amongst society and individuals.

It encourages that no one shall be deprived of equal access to certain resources and thatg everyone must get their share and thatt shall not be taken away from them.

4 0
3 years ago
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