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Ghella [55]
2 years ago
8

Synovec Corporation is expected to pay the following dividends over the next four years: $5.20, $16.20, $21.20, and $3.00. After

ward, the company pledges to maintain a constant 5.5 percent growth rate in dividends forever. If the required return on the stock is 9 percent, what is the current share price?
Business
1 answer:
umka21 [38]2 years ago
6 0

Answer:

Present value = $92.6899 rounded off to $92.69

Explanation:

Using the dividend discount model, we calculate the price of the stock today. It values the stock based on the present value of the expected future dividends from the stock. To calculate the present value of the next four dividends, we will use the following formula,

Present value = D1 / (1+r)  +  D2 / (1+r)^2  +  D3 / (1+r)^3  +  D4 / (1+r)^4  +

[(D4 * (1+g)  /  (r - g))  /  (1+r)^4]

Where,

  • r is the required rate of return
  • g is the constant growth rate in dividends

Present value = 5.2 / (1+0.09)  +  16.2 / (1+0.09)^2  + 21.2 / (1+0.09)^3  +  

3 / (1+0.09)^4  +  [(3 * (1+0.055)  /  (0.09 - 0.055))  /   (1+0.09)^4]

Present value = $92.6899 rounded off to $92.69

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Explain why the government is often more responsive to producer interests than to consumer interests when it comes to the imposi
tensa zangetsu [6.8K]

Answer:

The reason the government is often more responsive to producer interests than to consumer interests when it comes to the imposition of tariffs and quotas is:

it wants to ensure that producers are protected from foreign competition.

Explanation:

Producers face foreign competitive threats.  Consumers do not face such competition.  Therefore, the government will often consider the producers' interests more than the consumers' interests when imposing trade tariffs and quotas.  If local industries are not protected from their foreign competitors, the unemployment rate will increase and the economy will be flooded with cheap and low quality goods from other countries.  In that way, the US will be subsidizing the foreign producers indirectly.

4 0
2 years ago
What term represents the worldwide movement toward economic, financial, trade, and communications integration?
igomit [66]
I believe that the answer is globalization.
6 0
3 years ago
Read 2 more answers
Carrie D's has 8 million shares of common stock outstanding, 6 million shares of preferred stock outstanding, and 30 thousand bo
mr Goodwill [35]

Answer:

Weight of equity = 0.31067 or 31.067%  or   96/309

Explanation:

WACC or weighted average cost of capital is the cost of a firm's capital structure which can comprise of debt, preferred stock and common equity. The WACC for a firm can be calculated as follows,

WACC = wD * rD * (1-tax rate)  +  wP * rP  +  wE * rE

Where,

  • w represents the weight of each component based on market value in the capital structure
  • r represents the cost of each component
  • D, P and E represents debt, preferred stock and common equity respectively

To calculate the weight of equity in WACC computation, we first need to find out the Market value(MV) of each component and the market value of the overall capital structure.

MV of common equity = 8 million shares * 12 per share

MV of common equity = $96 million

MV of Preferred stock = 6 million shares * 30 per share

MV of Preferred stock = $180 million

The bonds are usually have a par value of $1000 unless specified otherwise.

MV of debt = 30 thousand * $1000 * 110%

MV of debt = $33 million

MV of total capital Structure = 96 + 180 + 33  => $309 million

Weight of equity = 96 / 309

Weight of equity = 0.31067 or 31.067%  or   96/309

6 0
3 years ago
At the end of a reporting period, ABC determines that its ending inventory has a cost of $300,000 and a net realizable value of
Phantasy [73]

Answer:

Decrease total assets and net income.

Explanation:

There is an inventory write down because the value of inventory has decreased. The net realizable value of inventory is less than its cost.

Inventory write down involves expensing a part of the inventory asset in the current period.

As a result of the write down, inventory would decrease. Inventory is part of total assets. Thus, total assets would decrease

Also, cost would increase because of the write down and so net income would decrease.

6 0
2 years ago
Please give an example of a government-created monopoly. is creating this monopoly necessarily bad public policy? please explain
lesantik [10]
Yes its against the law and can make your clients upset witch you.
And a government created monopoly would be the banks bailouts 
5 0
3 years ago
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