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Andru [333]
3 years ago
8

where an investmenVicky Robb is considering purchasing the common stock of Hawaii Industries, a rapidly growing boat manufacture

r. She finds that the firm’s most recent (2020) annual dividend payment was $2.50 per share. Vicky estimates that these dividends will increase at a 20% annual rate, g1, over the next 3 years (2021, 2022, and 2023) because of the introduction of a hot new boat. At the end of the 3 years (the end of 2023), she expects the firm’s mature product line to result in a slowing of the dividend growth rate to 8% per year, g2, for the foreseeable future. Vicky’s required return, rs, is 15%. Required: What is the current (end-of-2020) value of Hawaii’s common stock, P0 = P2020.t banker plays a crucial role in a public offering?
Mathematics
1 answer:
azamat3 years ago
8 0

Answer:

 

Step-by-step explanation:

present value of dividend for three years =

2.50 x 1.2 / 1.15 + 2.5 x 1.2² / 1.15² + 2.5 x 1.2³ / 1.15³

= 2.6087 + 2.722 + 2.84

= 8.17

present value of future cash flow after three years

= 2.5 x 1.2³ x 1.08 / .15 - .08

66.65

present value

= 66.65 / 1.15³ = 43.823

Total present value = 43.823 + 8.17

= 52 approx .

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Simplify u^2+3u/u^2-9<br> A.u/u-3, =/ -3, and u=/3<br> B. u/u-3, u=/-3
VashaNatasha [74]
  The correct answer is:  Answer choice:  [A]:
__________________________________________________________
→  "\frac{u}{u-3} " ;  " { u \neq ± 3 } " ; 

          →  or, write as:  " u / (u − 3) " ;  {" u ≠ 3 "}  AND:  {" u ≠ -3 "} ; 
__________________________________________________________
Explanation:
__________________________________________________________
 We are asked to simplify:
  
  \frac{(u^2+3u)}{(u^2-9)} ;  


Note that the "numerator" —which is:  "(u² + 3u)" — can be factored into:
                                                      →  " u(u + 3) " ;

And that the "denominator" —which is:  "(u² − 9)" — can be factored into:
                                                      →   "(u − 3) (u + 3)" ;
___________________________________________________________
Let us rewrite as:
___________________________________________________________

→    \frac{u(u+3)}{(u-3)(u+3)}  ;

___________________________________________________________

→  We can simplify by "canceling out" BOTH the "(u + 3)" values; in BOTH the "numerator" AND the "denominator" ;  since:

" \frac{(u+3)}{(u+3)} = 1 "  ;

→  And we have:
_________________________________________________________

→  " \frac{u}{u-3} " ;   that is:  " u / (u − 3) " ;  { u\neq 3 } .
                                                                                and:  { u\neq-3 } .

→ which is:  "Answer choice:  [A] " .
_________________________________________________________

NOTE:  The "denominator" cannot equal "0" ; since one cannot "divide by "0" ; 

and if the denominator is "(u − 3)" ;  the denominator equals "0" when "u = -3" ;  as such:

"u\neq3" ; 

→ Note:  To solve:  "u + 3 = 0" ; 

 Subtract "3" from each side of the equation; 

                       →  " u + 3 − 3 = 0 − 3 " ; 

                       → u =  -3 (when the "denominator" equals "0") ; 
 
                       → As such:  " u \neq -3 " ; 

Furthermore, consider the initial (unsimplified) given expression:

→  \frac{(u^2+3u)}{(u^2-9)} ;  

Note:  The denominator is:  "(u²  − 9)" . 

The "denominator" cannot be "0" ; because one cannot "divide" by "0" ; 

As such, solve for values of "u" when the "denominator" equals "0" ; that is:
_______________________________________________________ 

→  " u² − 9 = 0 " ; 

 →  Add "9" to each side of the equation ; 

 →  u² − 9 + 9 = 0 + 9 ; 

 →  u² = 9 ; 

Take the square root of each side of the equation; 
 to isolate "u" on one side of the equation; & to solve for ALL VALUES of "u" ; 

→ √(u²) = √9 ; 

→ | u | = 3 ; 

→  " u = 3" ; AND;  "u = -3 " ; 

We already have:  "u = -3" (a value at which the "denominator equals "0") ; 

We now have "u = 3" ; as a value at which the "denominator equals "0"); 

→ As such: " u\neq 3" ; "u \neq -3 " ;  

or, write as:  " { u \neq ± 3 } " .

_________________________________________________________
6 0
3 years ago
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