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andrew11 [14]
3 years ago
9

Suppose that a firm's recent earnings per share and dividends per share are $3.00 and $1.50, respectively. Both are expected to

grow at 10 percent. However, the firm's current P/E ratio of 20 seems high for this growth rate. The P/E ratio is expected to fall to 16 within five years. Compute a value for this stock by first estimating the dividends over the next five years and the stock price in five years. Then discount these cash flows using a 14 percent required rate.
Business
1 answer:
Alborosie3 years ago
6 0

Answer:

$46.90

Explanation:

The dividend in each year is the previous year's dividend multiplied by the growth factor, whereas the growth factor is 1 plus the expected growth rate of 10%, the EPS in each year would also be determined in a similar manner.

Note that the stock price is the present value of its dividends for 5 years as well as the price value of its year 5 share price(year 5 EPS*year 5 P/E ratio of 16)

Download xlsx
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a rectangular swimming pool has dimensions 45 metre by 20 metre concrete path of 3.5 m width is laid around it .Find the cost of
Anon25 [30]

Answer:

Rs. 5993.75

Explanation:

The computation of the cost of laying the path is given below:

= {area of(pool +path)- area of pool }

= ((45 + 3.5) × (20 + 3.5)) - (45 × 20)

= (48.5×23.5) - (45 × 20)

= 1139.75 - 900

= 239.75 square meters

Now the cost is

= 239.75 × 25

= Rs. 5993.75

8 0
3 years ago
what is the total amount of final goods and service produced in a country that people, businesses, governments, and foreigners p
Bas_tet [7]

The total amount of final goods and service produced in a country that people, businesses, governments, and foreigners plan to buy is Gross domestic product (GDP).

<h3>What is Gross domestic product (GDP)?</h3>
  • GDP is a metric for a country's economic output. GDP is a measure of the overall economic output of new products and services in a particular year.
  • The circular flow diagram can be used to illustrate GDP as a flow of income moving in one direction and expenditures on resources, products, and services moving in the opposite way.
  • According to this model, households purchase goods and services from businesses, and vice versa.
  • The circular flow figure shows how the national income calculation methods of using income and expenditures are equivalent.
  • Money (revenue from the sale of the commodities, services, and resources) travels counterclockwise in this picture while goods, services, and resources go clockwise.

Learn more about the Gross domestic product (GDP) with the help of the given link:

brainly.com/question/15682765

#SPJ4

5 0
1 year ago
A customer has made an investment that pays $20 of interest during its first year and that has appreciated by $250, for a year-e
love history [14]

Answer:

0.2571 or 25.71%

Explanation:

In this case, even though the initial amount invested is not given, it can be found by subtracting the amount by which the investment appreciated of the year-end value:

A = \$1,300 - \$250\\A = \$1,050

The return rate is given by the interest payed added to the amount appreciated, divided by the initial investment:

r=\frac{\$250+\$20}{\$1,050} \\r=0.2571= 25.71\%

The customer's total return is 0.2571 or 25.71%

6 0
3 years ago
They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their
mojhsa [17]

Answer: to protect the economic freedom of all of its citizens

Explanation:

The above quote by Adam Smith was him criticizing the common practice in those days of nations trying to control the spending habits of their citizens by passing restrictive laws and limiting the importation and production of certain goods and services.

It would therefore support the U.S. policy of protecting the economic freedom of her citizens such that they may trade whatever it is that they want - so long as it is legal - without restrictions by the government.

3 0
3 years ago
Purchasing stock on credit is called?​
Natalija [7]

Answer:

it's known as a margin call.

Explanation:

Buying on margin is borrowing money from a broker in order to purchase stock. Margin trading allows you to buy more stock than you'd be able to normally.

4 0
3 years ago
Read 2 more answers
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