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Gennadij [26K]
3 years ago
14

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 20 percent for the next three years, with the growth

rate falling off to a constant 8 percent thereafter. If the required return is 11 percent, and the company just paid a dividend of $1.45, what is the current share price?
Business
1 answer:
Grace [21]3 years ago
4 0

Answer:

current share price is $71.05

Explanation:

given data

grow at a rate = 20 percent

time = 3 year

growth rate falling off = 8 percent

dividend = $1.45

solution

we get here price of the stock in Year 3 that is 1 year before the constant dividend growth that is

P(3) = D(3) × (1 + g) ÷ (R - g)  .............1

P(3) = D0 (1 + g1)³ × (1 + g2) ÷ (R - g)

P(3) = \frac{1.45\times 1.20^3 \times 1.08}{0.11-0.08}

P(3) = $90.206  

and

then price of the stock today is present value of first three dividends  + present value of the Year 3 stock price

so price of the stock today is

P(0) = \frac{1.45(1.20) }{1.11} + \frac{1.45(1.20)^2}{1.11^2} +\frac{1.45(1.20)63}{1.11^3} +\frac{90.2016}{1.11^3}    

P(0) = $71.05

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Answer:

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Explanation:

For question 1:

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For question 2:

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Calculating the cost for the Ending inventory:

=1600\ units \times \$16.5\\\\=\$26,400\\\\

For question 3:

Calculating the absorption costing for the income statement:

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Sales (38,400\times \$24)\ \ \ \ \ \ \ \ \ \   \ \ \ \ \ \ \ \ \ \ \ \ \ \$921,600

-COGS(38,400\times \$16.5)\ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \  \$633,600

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Carol is interested in field engineering. What tasks would she have to perform as a field engineer?
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Answer:

1a.

                              Magic Realm, Inc.,

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1a. Please refer to the answer part

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2.

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