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Wewaii [24]
2 years ago
8

Lohn Corporation is expected to pay the following dividends over the next four years: $16, $12, $11, and $7.50. Afterwards, the

company pledges to maintain a constant 6 percent growth rate in dividends forever. If the required return on the stock is 16 percent, what is the current share price?
Business
1 answer:
andreev551 [17]2 years ago
8 0

Answer:

Current share price =$77.81

Explanation:

Price of the stock today = \frac{D1}{(1+ke)^1}+\frac{D2}{(1+ke)^2}+\frac{D3}{(1+ke)^3}+\frac{D4}{(1+ke)^4}+\frac{P4}{(1+ke)^4}.

where P4 = \frac{D5}{ke-g}

where D5 = D4(1+g)

Price of the stock today = \frac{16}{(1+0.16)^1}+\frac{12}{(1+0.16)^2}+\frac{11}{(1+0.16)^3}+\frac{7.50}{(1+0.16)^4}+\frac{7.50(1.06)}{(0.16-0.06)(1+0.16)^4} = $77.81

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wlad13 [49]

Answer:

$200

Explanation:

Calculation for How much of the $3,000 fee may Z deduct on his Schedule C for the current year.

Amortized over life of loan = ($3,000/60 months) x 4 months

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Note that September 1 to 31 December will give us 4 months

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Answer:

solving for the dollar

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3 years ago
How many years would it take for an investment of $280,000 to accumulate to at least $425,000 at 15% per year interest?
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3 years ago
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postnew [5]

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Present and future value tables of $1 at 3% are presented below
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Answer:

B. $228,122.

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