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Levart [38]
2 years ago
6

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years, because

the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $18 per share exactly 10 years from today and will increase the dividend by 6 percent per year thereafter. If the required return on this stock is 13 percent, what is the current share price
Business
1 answer:
Ierofanga [76]2 years ago
4 0

Answer:

The current share price $85.60

Explanation:

Share Price is the present value of all the future dividends associated with that share.

Use following formula to calculate the value of share at year 9.

Price of share at year 9 = Dividend  / ( Required rate of return - growth rate )

Price of share at year 9 = $18 / ( 13% - 6% )

Price of share at year 9 = $257.14

The Current Price of the bond can be calculated by discounting the Price of share at year 9.

Current Price = Price of share at year 9 x (  1 + r )^-n

Current Price = $257.14 x (  1 + 13% )^-9

Current Price = $85.60

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Accounting does anyone know how to do a work sheet
aleksley [76]

Answer:

you can download it as a pdf document and then you can write on it, or you can print it out.

Explanation:

4 0
2 years ago
Four years ago, Velvet Purses purchased a mailing machine at a cost of $154808. This equipment is currently valued at $25955 on
AVprozaik [17]

Answer:

the book value of the shareholder equity is $53,413

Explanation:

The computation of the book value of the shareholder equity is shown below;

Book value of shareholders equity is

= Book value of mailing + net working capital - Long term debt

= $25,955 + $92,535  $65,077

= $53,413

Hence, the book value of the shareholder equity is $53,413

5 0
3 years ago
Bramble Corp. recorded operating data for its auto accessories division for the year. Sales $790000 Contribution margin 260000 T
Andrei [34K]

Answer:

80%

Explanation:

For computing the return on investment first we have to need the following calculations

New contribution margin = Old contribution margin + increase  in contribution margin

= $260,000 + $30,000

= $290,000

And,

Net Income = Contribution margin - Total direct fixed costs

= $290,000 - $90,000

= $200,000

ROI = Net income ÷  average operating assets

= $200,000 ÷ $250,000

= 80%

3 0
3 years ago
An investment of $1,000 is earning interest at the rate of 3.8% compounded daily over 3 years. Approximately how much interest i
Paladinen [302]
<span>Approximately $120.75 interest is earned on the investment.</span>

 

The correct answer between all the choices given is the third choice or letter C. I am hoping that this answer has satisfied your query and it will be able to help you in your endeavor, and if you would like, feel free to ask another question.

7 0
3 years ago
The economic growth model predicts that the
Mamont248 [21]

Answer: B

Explanation: The economic growth theory that predicts convergence of developing countries with developed countries is known as the Neoclassical Growth Theory developed by Robert Solow.

One of the conclusions of the Neoclsssical Growth Model is that because capital is scarce in developing countries, it would have a high marginal productivity and higher rates of savings would result. Hence the growth rates of developing countries should exceed that of developed countries.

Because of the higher growth rate of developing countries, there ought to be a convergence between the per capita income of developing countries and developed countries.

I hope my answer helps.

Goodluck

7 0
3 years ago
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