1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Anna007 [38]
3 years ago
10

Colgate-Palmolive Company has just paid an annual dividend of $ 1.50$1.50. Analysts are predicting dividends to grow by $ 0.12$0

.12 per year over the next five years. After​ then, Colgate's earnings are expected to grow 6.0 %6.0% per​ year, and its dividend payout rate will remain constant. If​ Colgate's equity cost of capital is 8.5 %8.5% per​ year, what price does the​ dividend-discount model predict Colgate stock should sell for​ today?
Business
1 answer:
klio [65]3 years ago
8 0

Answer:

The price does the​ dividend-discount model predict Colgate stock should sell for​ today is $66.47

Explanation:

In order to calculate the price does the​ dividend-discount model predict Colgate stock should sell for​ today we would have to calculate first the Present value of dividend of next 5 years as follows:

Present value of dividend of next 5 years as follows=

Year Dividend Discount factor Present value      

a             b          c=1.085^-a             d=b*c      

1 $       1.62 0.921659 $       1.49      

2 $       1.74 0.849455 $       1.48      

3 $       1.86 0.782908 $       1.46      

4 $       1.98 0.721574  $       1.43      

5 $       2.10 0.665045 $       1.40      

Total                                   $       7.25

Then, we have to calculate the Present value of dividend after 5 years as follows:

Present value of dividend after 5 years=D5*(1+g)/(Ke-g)*DF5

Present value of dividend after 5 years=$2.10(1+6%)/(8.50%-6%)* 0.665045

Present value of dividend after 5 years=$59.22

Current value of stock=Present value of dividend of next 5 years+ Present value of dividend after 5 years    

Current value of stock= $7.25+$59.22      

Current value of stock=$66.47        

The price does the​ dividend-discount model predict Colgate stock should sell for​ today is $66.47

You might be interested in
We believe in creating loyal customers by providing a superior experience at a great value. We are committed to direct relations
Likurg_2 [28]

Answer:

b) mission statement

Explanation:

A mission statement is a formal description that captures all what a company is set out to do in achieving their vision. It is a brief summary of a company’s philosophy, goals and objectives.

A mission statement is what gives a clear direction to a business, as the purpose of a business is well clarified. A mission statement which answers the basic question of “Why does your business exist” helps in increasing employee engagement as well as ensuring the vision of the company is actualized.

The statement of Dell as highlighted in the question above is part of Dell’s mission statement, as it tells why the business exist.

3 0
3 years ago
Emerald Printing Company projected the following information for next year:
elena55 [62]

Answer:

$200,000

Explanation:

Selling price per unit = $60.00

Contribution margin per unit = $45.00

Total fixed costs = $150,000

Tax rate = 30%

Contribution margin ratio = Contribution margin ÷ Selling price

                                           = $45 ÷ $60

                                            = 0.75

Hence,

Break-even point =Total Fixed costs ÷ Contribution margin ratio

                              = 150,000 ÷ 0.75

                              = $200,000

5 0
3 years ago
Equipment with an original cost of $75,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000. As a result of
Tcecarenko [31]

Answer:

O increase by $48,000

Explanation:

A loss is made on disposal of an asset when the amount received from the disposal is lower than the carrying amount of the asset. The carrying amount or net book value of an asset is the difference between the cost of the asset and its accumulated depreciation.

Hence

Carrying amount = $75,000 - $20,000

= $55,000

Let the amount received on disposal be K

K - $55,000 = -$7,000

K = $55,000 - $7,000

= $48,000

This is the amount received from the disposal and it represents an increase in cash.

7 0
3 years ago
The following financial information is presented for three different companies. Determine the missing amounts.
Leto [7]

Answer:

Note: <em>The organized question is attached</em>

<em />

d. Net income = Income from operating - Other expenses and losses

Net income = $15,000 - $4,000

Net income = $11.000

f. Gross profit - Sales - Cost of goods sold

$38,000 = $95,000 - Cost of goods sold

Cost of goods sold = $95,000 - $38,000

Cost of goods sold = $57,000

h. Income from operations = Net income - Other expenses and losses

Income from operations = $11,000 + $7,000

Income from operations = $18,000

g. Income from operations = Gross profit - Operating expenses

$18,000 = $38,000 - Operating expenses

Operating expenses = $38,000 - $18,000

Operating expenses = $20,000

7 0
3 years ago
Employers cite dressing inappropriately as one of the biggest mistakes job applicants make in interviews. True or False
IrinaK [193]

Answer:

True

Explanation:

If you dress inappropriately, that is not showing a good first impression. Most, if not all jobs want to have employees that can dress well, cooperate, and work well with others.

6 0
3 years ago
Other questions:
  • Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting D
    11·1 answer
  • Assets are equal to
    9·2 answers
  • Elvira is using the rational model of decision making. the alternative that she chose and implemented does not appear to be work
    12·1 answer
  • The purpose of the "quiet period"a company must observe from the time it files a registration statement with the SEC until after
    9·1 answer
  • Refer to exhibit 4-5. if a free market were allowed in the transplanted kidney market, then the equilibrium price would be p2. t
    14·1 answer
  • The faculty of a Midwestern business school is comprised of 33 males and 4 females. The past five candidates hired have all been
    6·1 answer
  • Bauer Software's current balance sheet shows total common equity of $5,125,000. The company has 530,000 shares of stock outstand
    9·1 answer
  • Please help I will mark you as brainliest!!
    7·1 answer
  • Which descriptions are examples of Logistics Planning and Management Services workers? Check all that apply.
    12·2 answers
  • A company sells 500 sleds per month for $80. Variable costs are $41 per unit and fixed expenses are $3,500 per month. The compan
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!