Answer:
the current share price is $73.31
Explanation:
The computation of the current share price is shown below:
P0 = [{D0 × (1 + g)} ÷ (1 + r1)] + [{D0 × (1 + g)^2} ÷ (1 + r1)^2] + [{D0 × (1 + g)^3} ÷ (1 + r1)^3] + [{D0 × (1 + g)^4} ÷ {(1 + r1)^3(1 + r2)}] + [{D0 × (1 + g)^5} ÷ {(1 + r1)^3(1 + r2)^2] + [{D0 × (1 + g)^6} ÷ {(1 + r1)^3(1 + r2)^3] + [{D0 × (1 + g)^7} ÷ {(rC - g)(1 + r1)^3(1 + r2)^3]
= [($4 × 1.06) ÷ 1.15] + [($4 × 1.062) ÷ 1.152] + [($4 × 1.063) ÷ 1.153] + [($4 × 1.064) ÷ (1.153 × 1.13)]
+ [($4 × 1.065) ÷ (1.153 × 1.132)] + [($4 × 1.066) ÷ (1.153 × 1.133)] + [($4 × 1.067) ÷ {(0.11 - 0.06)(1.153 × 1.133)}]
= $3.69 + $3.40 + $3.13 + $2.94 + $2.76 + $2.59 + $54.82
= $73.31
hence, the current share price is $73.31
Answer:
oi
Explanation:
hi how are you feeling today
Answer:
The rank will be
1.Project C
2.Project A
3.Project B
Explanation:
The profitability index formula is
(NPV + Initial investment) ÷ Initial Investment
We have to get this index for each project
Project A ($80,000+90,000)÷ $80,000=2. 125
Project B ($120,000+ 110,000)÷ $120,00 =1.916
Project C ($160,000+ 200,000)÷$160,000 =2.25
The higher profitability index is from Project C, then Project A and finally Project B
