Answer:
P₀ = $59.45
Explanation:
the numbers are missing so I looked for a similar question:
- expected EPS = $2.775
- retain 0% of earnings (years 1 - 2)
- retain 48% of earnings (years 3 - 4)
- then retain 23%
- expected return on new projects = 22.4%
- Re = 10.7%
growth rate = retention rate x return on new projects
g₁ = not given EPS₁ = $2.775
g₂ = 1 x 22.4% = 22.4% EPS₂ = $3.3966
g₃ = 1 x 22.4% = 22.4% EPS₃ = $4.1574
g₄ = 0.48 x 22.4% = 10.752% EPS₄ = $4.6044
g₅ = 0.48 x 22.4% = 10.752% EPS₅ = $5.0995
g₆ = 0.23 x 22.4% = 5.152% EPS₆ = $5.3622
dividend payout ratio expected dividend
year 1 = 0 $0
year 2 = 0 $0
year 3 = 0.52 $2.1618
year 4 = 0.52 $2.3943
year 5 = 0.77 $3.9266
year 6 = 0.77 $4.1289
since the growth rate became constant at year 6, we can find the terminal value for year 5:
terminal value year 5 = $4.1289 / (10.7 - 5.152%) = $74.4214
P₀ = $0/1.07 + $0/1.07² + $2.1618/1.07³ + $2.3943/1.07⁴ + $3.9266/1.07⁵ + $74.4214/1.07⁵ = $0 + $0 + $1.7647 + $1.8266 + $2.7996 + $53.0614 = $59.45
Answer:
At 9.70% discount rate would you be indifferent between these two plans.
Explanation:
Present Value of Perpetuity = P/r
Present Value of Annuity = P/r[1 - (1 + r)^-n]
$14,000/r = $20,000. /r[1 - (1 + r)^-13]
(1 + r)^-13 = 1 - $14,000/$20,000.
(1 + r)^13 = 10/3
r = 9.70%
Therefore, at 9.70% discount rate would you be indifferent between these two plans.
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Answer:
The result of Marlene hiring an attorney to obtain her return would only be successful if she did not voluntarily give up her right to ownership of the plates and can provide an evidence to that effect
Explanation:
The result of Marlene hiring an attorney to obtain her return would only be successful if M can produce an evidence showing that she did not intentionally dump the plates into the town dump ( i.e. she did not voluntarily give up her right to ownership of the plates ) If not the plates will be transferred to give to Joe under the code name " finders keepers "
The process of developing or being developed.
