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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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On October 1, 2017, Vaughn, Inc., leased a machine from Fell Leasing Company for five years. The lease requires five annual paym
Alisiya [41]

Answer:

Explanation:

1.Amount to be paid Annually to fell leasing Company = $10,000.

Incremental rate of borrowing = 11%

Lease Period = 5 yrs.

2. Value of lease equipment as on 1st October 2017 i.e., date of lease.

= 10,000 * (PVOA) = (11* for 5 years)

=10,000 * 3.6959 (using -PVAF table)

= $ 36,959

Factors are used according to the table of PVAF

3.Lease liability as on 31-12-2017

= 10,000 * PVAD (11 * 4 years) [since 4 years in these)

 = 10,000 * 3.44371

= $ 34,437.10

Lease liability as on 31st Dec 2018

= 10,000 * PVAD (11% 3 years) (still 3 yrs left as on 31-12 -2018)

= 10,000 * 2.71252 = $ 27,125.20

7 0
3 years ago
Employees who are not a target of sexual harassment but work where it is occurring can file what type of lawsuit
LekaFEV [45]

Answer: Third-party lawsuit

Explanation:

A third party lawsuit is a form of lawsuit which is brought against another individual or another party in regards to the injuries which are being suffered by the plaintiff.

A third party lawsuit can be filed by the employees who are not a target of sexual harassment but work where it is occurring.

6 0
2 years ago
Why is it important to include a persons title when developing a reference sheet?
jonny [76]
It is important to include a person's title when developing a reference sheet because it gives credit to the person
6 0
3 years ago
Read 2 more answers
Define and explain each concept and give specific examples: a. Marginal Propensity to Consume and Marginal Propensity to Save (
siniylev [52]

Answer:

The marginal propensity to save (MPS) is the portion of each extra dollar of a household's income that's saved. MPC is the portion of each extra dollar of a household's income that is consumed or spent. Consumer behavior concerning saving or spending has a very significant impact on the economy as a whole.

Multiplier Effect

for every dollar the government spends, it will create a greater than one dollar change in GDP

Spending Multiplier

1 / 1-MPC or 1 / MPS; increase in spending .: + multiplier; decrease in spending .: - multiplier

Deficit spending is the amount by which spending exceeds revenue over a particular period of time, also called simply deficit.

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Explanation: Marginal Propensity to Consume

the fraction of any change in disposable income that is consumed; MPC = change in C / change in DI

Marginal Propensity to Save

the fraction of any change in disposable income that is saved; MPS = change is S / change in DI

3 0
2 years ago
Which of the following statements is​ true?
pashok25 [27]

Answer:

D. None of the above.

Explanation:

When there's a change in demand, the demand curve shifts and only quantity demanded changes- it either increases or reduces but price doesn't change. A change in demand is caused by factors that affect a consumer's demand for a good other than the price of the commodity.

Some of the factors that cause a change in demand include:

1. Change in income

2. Change in taste

3. Season

When there's a change in supply, the supply curve shifts and quantity supplied changes but there's no change in price. Change in supply is caused by other factors that affect supply other than price.

8 0
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