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Kay [80]
3 years ago
12

g announced that it plans to cut its dividend from $2.50 to $1.50 per share (next year) and use the extra funds to expand its op

erations. Prior to this announcement, Zeke's dividend growth rate was zero per year and Zeke's stock was trading at $25.00 per share. With the new expansion, JRN's dividends are expected to grow at 4% per year indefinitely. If Zeke’s risk is unchanged by the expansion, what is the value of a share of Zeke after the
Business
1 answer:
mote1985 [20]3 years ago
7 0

Answer:

The value of the Share of Zeke after the new Expansion is $25.

Explanation:

As there was no growth in the dividend before change, Price of the share from a stable dividend payment can be calculated by following formula.

Price  = Dividend / Required rate of return

As we have the share price and the dividend amount we need to calculate the required rate of return.

Required rate of return = Dividend / Price

Placing value in the formula

Required rate of return = $2.50 / $25.00 = 0.1 = 10%

After New Expansion

Dividend = $1.50

Growth rate = 4%

The share price can be calculated by the dividend growth formula, as follow

Price of share = Dividend / (Rate of return - growth rate)

Price of share = $1.50 / (10% - 4%)

Price of share = $1.50 / 6%

Price of share = $25

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Answer:

The answer is: Paid-in Capital in Excess of Par Value will be increased for $180,000.

Explanation:

Norben Company's stock par value was 5$, so 6,000 stocks should be worth $30,000 par value. Since the stocks were sold at $210,000, the difference between fair market price and par value $180,000 ($210,000 - $30,000) should be credited to the account Paid-in Capital in Excess of Par Value.

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4 years ago
The "3 cs" is a popular guideline for writing user stories. what does each of the three c's represent?
Inessa05 [86]
<span>The "3 cs" which is a popular guideline for writing user stories are;
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8 0
3 years ago
Asa works as an order-taker at Simply Salads, a fast-food restaurant. He does not cook food, or even package the final order, bu
Softa [21]

Answer:

Hierarchical organizational structure

Explanation:

Hierarchical organizational structure is the type of organization structure where the level of management are divided according to function and services they are performing.

though, the level of management is divided into top level management (the planning executives: boards of member, executives, shareholders), middle (determined how the plan and organization goal will be implemented: managers) and lower level (implement the plan: the supervisor, foreman or shift manager), then will have the workers.

this management system involves decision and authority being transfer from level to level.

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6 0
3 years ago
Which belief best reflects the economic theories of Karl Marx?
Shtirlitz [24]

Answer:

B. Class tensions will lead to the end of market economies.

Explanation:

According to the Marxists theory, the tension between the capitalist and the working class gives birth to the class conflict in the society. It is tension that is created as the result of the exploitation and conflict between the two. This conflict further would initiate a revolution among the working class that would turn the capitalist class upside down. The exploitation faced by the working class by the capitalists is the major force that would turn them to be rebellious.

7 0
3 years ago
The Wilmoths plan to purchase a house but want to determine the after-tax cost of financing its purchase. Given their projected
iVinArrow [24]

Answer:

the annual after-tax cost of financing the purchase of the home is $23,638.40

Explanation:

The computation of the annual after-tax cost of financing the purchase of the home is shown below:

= Installment amount - tax saving

= $33,200 - ($29,880 × 32%)

= $33,200 - $9,561.60

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hence, the annual after-tax cost of financing the purchase of the home is $23,638.40

We simply applied the above formula

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