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jeka94
3 years ago
10

Metallica Bearings, Incorporated, is a young start-up company. No dividends will be paid on the stock over the next nine years b

ecause the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $14 per share 10 years from today and will increase the dividend by 3.9 percent per year thereafter. If the required return on this stock is 11.5 percent, what is the current share price
Business
1 answer:
Artyom0805 [142]3 years ago
5 0

Answer:

$69.08

Explanation:

Calculation to determine the current share price?

First step is to determine the price of the stock in year 9

P9=$14/(.115− .039)

P9=$14/0.076

P9=$184

Now let determine the Current price

P0=184.00/(1+.115)^9

P0=184.00/1.115^9

P0=184.00/2.6636

P0=$69.08

Therefore the current price is $69.08

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3 years ago
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Ireland Corporation obtained a $40,000 note receivable from a customer on June 30, 2021. The note, along with interest at 5%, is
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Answer:

$ 39,165.00  

Explanation:

the amount expected from customer in one year is the face value of the note receivable plus interest i.e $40,000*105%=$42,000

The interest on discounting is :

$42,000*9%*9/12=$2,835

The amount of cash that Ireland would receive from the Cloverdale Bank is the amount that Cloverdale would on maturity of the note receivable i.e $42,000, less the discount on the note of $2,385

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Cloverdale would pay $ 39,165.00  on September 2021 to Ireland Corporation

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4 years ago
historically, demand has averaged 2546 units with a standard deviation of 149. the company currently has 2610 units in stock. wh
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2 years ago
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Marketing plays an important role in understanding the business.

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