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Mrac [35]
3 years ago
7

River City Recycling just paid its annual dividend of $1.15 per share. The required return is 12.3 percent and the dividend grow

th rate is 0.75 percent. What is the expected value of this stock five years from now
Business
1 answer:
Tasya [4]3 years ago
6 0

Answer:

10.34

Explanation:

This question refers to Dividend Growth Rate with respect to Stock valuation

The model estimates the dividends over a defined period based on an assumed growth rate to determine the future value of the stock.

The formular to calculating the expected value is as follows

\frac{Dividend Amount(1+Rate)^{Years}  }{Expected Return - Rate}

Please note:

Expected return and Rate are expressed in percentage i.e divided by 100.

Fitting into the formular:

\frac{1.15(1+0.0075)^{5} }{0.123 - 0.0075}

The resulting answer = 10.34

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Evan, a shareholder, owned 20% of Yorker's stock for 200 days and 25% of Yorker's stock for the remaining 165 days of the year (
mel-nik [20]

Answer:

C. $13,356

Explanation:

Evan, a shareholder, owned 20% of Yorker's stock for 200 days and 25% of Yorker's stock for the remaining 165 days of the year (not a leap year).

Using the required per-day allocation method, Evan's share of the S corporation's ordinary income of $60,000 (rounded to the nearest dollar) is:

0.2 x 60,000 x (200 / 365) + 0.25 x 60,000 x (165/365) = $13,356.16

7 0
3 years ago
you own $750000 worth of stock, and you are worried the price may fall by year-end in 6 months. you are considering
timofeeve [1]

Answer: D. I, II, and III

Explanation:

If expecting a price deduction, you can buy Put options. These give you the right to sell an underlying stock at a certain price regardless of what the price in the market is. If you purchased this, you can sell your stock above market value if it does go down.

You can sell write call options for a fee where you give the buyer the right to buy your shares at a certain price in future. This is only valuable if prices rise so as you are expecting prices to fall, you could make a premium on the call option contract fees if prices fall without having to sell off your shares.

Hedging with puts is better than short calls if you are expecting a major stock price decline as the opportunity for profit is higher.

8 0
3 years ago
What was the most helpful strategy you learned during this course? How will you apply this strategy in your future studies here
Verizon [17]

Explanation:

As an online university, UoPeople assists in the strategic knowledge that the university student will use in his professional life. The most useful strategy learned was that of time management. It is important to know how to manage the time to carry out the online education curriculum and the activities carried out offline in order to achieve the objectives defined effectively.

Therefore, through time management, there is the possibility of greater organization of academic and social life, as well as increased motivation.

8 0
4 years ago
Assuming equivalent units of conversion costs is 7,000 units (note this is not the answer for the above question) at the end of
monitta

Answer:

$157 per equivalent unit

Explanation:

Note: <em>The full question is attached as picture below</em>

<em />

Conversion cost per equivalent unit = Conversion costs added during February / Equivalent units of conversion costs

Conversion cost per equivalent unit = $1,100,000 / 7000 units

Conversion cost per equivalent unit = $157.14286

Conversion cost per equivalent unit = $157 per equivalent unit

6 0
3 years ago
Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a dividend. An analyst forecasts
Lemur [1.5K]

Answer:

horizon value at year 5 = Div₆ / (Re - g)

  • Div₆ = ($2.75 x 1.143²) x 1.0372 = $3.726384483
  • Re = 12.4%
  • g = 3.72%

horizon value at year 5 = $3.726384483 / (12.4% - 3.72%) = $42.93

current value P₀ = $2.75/1.124³ + $3.14325/1.124⁴ + $46.52273/1.124⁵ = $1.937 + $1.969 + $25.932 = $29.838 ≈ $29.84

1) dividend yield = 0/$29.84 = 0%

capital gains yield = (P₁ - P₀) / P₀

P₁ = $2.75/1.124 + $3.14325/1.124² + $46.52273/1.124³ = $2.447 + $2.488 + $32.762 = $37.697 ≈ $37.70

capital gains yield = ($37.70 - $29.84) / $29.84 = 26.34%

2) Goodwin has yet to record a profit (positive net income). Is this statement a possible explanation for why the firm hasn't paid a dividend yet?

A. Yes

Since dividends must be paid out from net profits or retained earnings.  

8 0
3 years ago
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