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
LuckyWell [14K]
3 years ago
6

Great Lakes Steel Supply is losing significant market share and thus its managers have decided to decrease the firm's annual div

idend. The last annual dividend was $130 per share but all future dividends will be decreased by 275 percent annual What is a share of this stock worth today at a required return of 155 percent? a. $609 b. $6.93 c. $6.50 d. $6.68 e. $6.98
Business
1 answer:
Colt1911 [192]3 years ago
6 0

Answer:

There's an error in the numbers for this question; I found the correct one and pasted it below;

"Great Lakes Steel Supply is losing significant market share and thus its managers have decided to decrease the firm's annual dividend. The last annual dividend was $1.30 per share but all future dividends will be decreased by 2.75 percent annually. What is a share of this stock worth today at a required return of 15.5 percent? "

Explanation:

Use dividend discount model (DDM) to calculate the stock price

P0 = \frac{D0(1+g)}{r-g}

whereby,

P0 = Current price

D0 = Last dividend paid = 130

g = growth rate = -275% or -2.75 as a decimal

r = required return = 155% or 1.55 as a decimal

Next, plug in the numbers to the DDM formula above;

P0 = \frac{1.30(1-0.0275)}{0.155 + 0.0275} \\ \\ = \frac{1.2643}{0.1825} \\ \\ =6.9277

Therefore this stock is worth $6.93

You might be interested in
They want to make a profit of $55,498 Unit Variable costs = $11 Unit selling price is = $37 Fixed costs = $18,470 How many units
belka [17]

Answer:

2,845 units

Explanation:

To find the answer you need to consider that the profit is equal to the sales minus the costs.

Let's consider that x is the number of units sold

Sales= Price per unit*number of units sold

Sales= 37x

Variable cost= Cost per unit*number of units sold

Variable cost= 11x

Fixed cost= 18,470

55,498=37x-11x-18,470

55,498+18,470=26x

73,968=26x

x=73,968/26= 2,845

According to this, the answer is that they need to sell 2,845 units to make the desired profit.

6 0
3 years ago
Roak Company and Clay Company are similar firms that operate in the same industry. Clay began operations 2 years ago and Roak st
Paladinen [302]

Answer:

<h3>Required:</h3>

1. (a) Which company has the better profit margin? (b) Which has the better asset turnover? (c) Which has thebetter return on assets?

2. Which company has the better rate Of growth in sales?

3. (a) Did Roak successfully use financial leverage in the current year? (b) Did Clay?

4 0
3 years ago
During the current year, Central Auto Rentals purchased 60 new automobiles at a cost of $15,000 per car. The cars will be sold t
borishaifa [10]

Answer:

a. $0.20

b. $322,000

Explanation:

Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.

It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset .

The amount of depreciation to be recognized for each mile that a rental automobile is driven

= ($15,000 - $6,000)/45,000

= $9,000/45,000

= $0.20

Total millage expected of the 60 cars before disposal

= 60 * 45,000 miles

= 2,700,000 miles

The total amount of depreciation expense that Central Auto Rentals should recognize on this fleet of cars for the year

= 1,610,000/2,700,000 * ($9,000 * 60)

= $322,000

4 0
2 years ago
WILL GIVE BRAINLIEST Analyze an example of government failure in U. S. economic history.
Gnesinka [82]
Financial de-regulation from the Reagan Administration in the 80's had the largest impact on the financial crisis of 2008.
5 0
3 years ago
Steve Jack and Chelsy Stevens formed a partnership, dividing income as follows: Annual salary allowance to Stevens of $176,130.
denpristay [2]

Answer:

$45,440.00

Explanation:

Jack's interest on capital =5%*$90,000=$4,500.00

Stevens' interest on capital =5%*$111,000=$ 5,550.00  

Net income left to be shared in ratio 1:2 is the net income of $309,000 minus the total interest on capital of $10,050 i.e $4,500+$5,550 and salaries to Stevens

Net income left for sharing=$309,000-$10,050-$176,130=$ 122,820.00  

Jack's share of profit=1/3*$ 122,820.00   =$ 40,940.00    

Stevens' share of profits=2/3*$122,820.00  =$ 81,880.00  

Amount distributed to Jack=$4,500+$ 40,940=$45,440.00  

6 0
3 years ago
Other questions:
  • A major shift for personnel management arrived in the 1930's with the emergence of:
    10·1 answer
  • My Work Ramon works for a large company that is considering starting a new business unit to sell personalized coffee mugs. He ha
    5·1 answer
  • Cougar Corporation bought inventory on account on August 23rd. Cougar paid its supplier for the inventory on August 28th. Cougar
    7·1 answer
  • A ________ marketing strategy develops products and promotions designed to please large groups of people
    7·1 answer
  • ________ is the stealing of another person's Social Security number, credit card number, and other personal information for the
    12·1 answer
  • Define the terms anatomy and physiology. List and define the following subdivisions of these two areas of study:
    5·1 answer
  • What’s the difference between a commercial bank and an investment bank? List the major types of financial institutions, and brie
    9·1 answer
  • Rom what you know of the company so far, what will be among the variousconstituencies that the CSIRT will serve?
    13·1 answer
  • When selecting a mentor, which of the following should be considered? (Select all that apply)
    11·1 answer
  • on january 1, 2024, howell enterprises purchases a building for $151,000, paying $41,000 down and borrowing the remaining $110,0
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!