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Ghella [55]
3 years ago
13

The Highfield Company is going through a five-year of fast growth at 20% initially, and then it will grow at a perpetual rate of

4%. The required rate of return is 10% and it just paid a dividend of $2. What is the stock price today?
a) 43.88
b) 86.26
c) 66.64
d) 31.5
Business
1 answer:
slava [35]3 years ago
7 0

Answer:

P0 = $66.6429 rounded off to $66.64

Option c is the correct answer

Explanation:

Using the two stage growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula to calculate the price of the stock today is,

P0 = D0 * (1+g1) / (1+r)  +  D0 * (1+g1)^2 / (1+r)^2  +  ...  +  D0 * (1+g1)^n / (1+r)^n  +  [(D0 * (1+g1)^n * (1+g2) / (r - g2)) / (1+r)^n]

Where,

  • g1 is the initial growth rate
  • g2 is the constant growth rate
  • r is the required rate of return

P0 = 2* (1+0.2) / (1+0.1)  +  2 * (1+0.2)^2 / (1+0.1)^2  +  2 * (1+0.2)^3 / (1+0.1)^3  

+  2 * (1+0.2)^4 / (1+0.1)^4  +  2 * (1+0.2)^5 / (1+0.1)^5  +

[(2 * (1+0.2)^5 * (1+0.04)  /  (0.1 - 0.04)) / (1+0.1)^5]

P0 = $66.6429 rounded off to $66.64

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Explique la teoría del valor y de un ejemplo con algún bien o servicio de su uso cotidiano. (colombia)
emmasim [6.3K]

Answer:

En economía, se habla de teorías del valor para indicar el conjunto de concepciones sobre la génesis y determinación del valor, como propiedad de las mercancías distinta del costo y lógicamente antecedente al precio, que constituye su manifestación fenomenal en esta perspectiva.

La economía política siempre ha tratado de responder a la pregunta: ¿de dónde viene el valor? Las respuestas fueron muy divergentes. Van desde la escasez de bienes disponibles, a su utilidad, a la necesidad de remunerar los factores productivos, incluido el capital y considerando su remuneración; - el beneficio - como recompensa por la abstinencia del capitalista, que puede permitirse renunciar al consumo para utilizar la propia riqueza de forma productiva, etc.

6 0
3 years ago
A company can expect to receive which benefits when it uses a budgeting​ process?
yaroslaw [1]

Available Options:

a) The budget helps motivate employees to achieve sales growth and cost-reduction goals.

b) The budget provides managers with a benchmark against which to compare actual results for performance evaluation.

c) The planning required to develop the budget helps managers foresee and avoid potential problems before they occur.

d) All of the above.

Answer:

Option D. All of the above.

Explanation:

The reason is that when budgets are set every personnel in the organization is given a task along with the restriction on the use of excessive resources of the company by generating a standard number of output, which is benefitial to the company and the managers as well.

Furthermore, standard costs are used in budgeting to estimate the costs of the operations of the company which means that the standard cost would be used for actual units to compare the actual results to make meaningful conclusions.

At the end, the main benefit of the budgeting is that it highlights the potential issues in the operating systems of the organization which must be corrected to avoid the same advers outcome in the future.

So all of the statements are correct.

5 0
3 years ago
Which of the following would best describe what would happen to the time value at the same nominal annual rate of a cash flow as
djverab [1.8K]

Answer:

A) Both the present value and future value would increase.

Explanation:

If the compounding frequency increases, then both the present value and the future value will increase because the effective annual rate will increase. E.g. interest used to be compounded every 6 months, now it is compounded monthly.

Both the present value and the future value vary jointly, if the present value decreases, then the future value will also decrease, and vice versa.

7 0
4 years ago
In the context of managing inventories in supply chains,__________is the time between placement of an order and its receipt.
Ivan

Answer:

a. The lead time

Explanation:

The lead time is the time that shows the difference between the time at which the process gets started and the time at which the process get  finished. This can be reviewed in the manufacturing, supply chain management at the time when there is a prior processing, within processing and after processing

Therefore according to the given situation, the option a is correct

hence, all the other options are incorrect

=

3 0
3 years ago
Pls help it’s due tomorrow!
maria [59]

Answer:

A. Contact Information for Refrences.

Explanation:

Hi there! To me it makes the most sense because it has nothing to do with a carrer plan. Sure, refrences are benefical but they do not determine what can help you grow and succed in the workforce.

I hope this helps! Good luck! :)

4 0
3 years ago
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