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Levart [38]
3 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]3 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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Northwestern Lumber Products currently has 17,500 shares of stock outstanding. Patricia, the financial manager, is considering i
SpyIntel [72]

Answer:

<em>15,101.15 shares</em>

Explanation:

<em>Northwestern Lumber products has =17,500 shares of stock</em>

<em>The Manager Patricia considers issuing  $135,000 of debt, at an interest rate of 6.6%</em>

<em>Let us find how many shares of stock will be outstanding once the debt is issued,</em>

<em>Given that </em>

<em>$65,000/17,500 =  ($65,000 − 135,000(.066))/X </em>

<em>Then X = 15,101.15 shares</em>

5 0
3 years ago
Define term common market​
Stells [14]

Answer:

A group of countries imposing few or no duties on trade with one another and a common tariff on trade with other countries is called common market.

Explanation:

hope this helps you....

God bless you.....

Have a great day....

(≧▽≦)

5 0
2 years ago
Edmond, the CEO of Hartman Manufacturing, said to his new vice president of accounting, "In the past I had resistance to new ide
Maurinko [17]

Answer:

A. strategy implementation.

Explanation:

Strategy implementation -

It refers to the practice of complying all the strategies and plans in order to attain some goal , is referred to as strategy implementation .

The practice require proper thinking and method , in order to plan in a very proper manner to accomplish the goal .

The process require some documents or soft copy of the steps involved and the rate of progress to track the project in a very concise manner .

Hence , from the given scenario of the question ,

The correct answer is A. strategy implementation.

6 0
3 years ago
Core Corporation reported current earnings and profits of $250,000. It distributed a buildingwith an adjusted basis to Core of $
Svet_ta [14]

Answer:

B. $140,000

Explanation:

An adjusted basis refers to the total cost of acquiring an asset. In include transportation, installing, commissions, and all other relevant fees. The fair market value represents the price an asset can fetch if sold in the market.  It is the amount that a company will receive if it were to dispose of an asset in the market.

Shareholders will be the fair market value adjusted for the mortgage balance.

=$ 230,000 - $ 90,000

=$140,000

8 0
3 years ago
Multiple Choice
pickupchik [31]

Answer:

inflation

Explanation:

7 0
3 years ago
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