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Stolb23 [73]
3 years ago
13

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next seven years, because

the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $14.25 per share 8 years from today and will increase the dividend by 6.00 percent per year thereafter. Required: If the required return on this stock is 14.00 percent, what is the current share price?
Business
1 answer:
umka2103 [35]3 years ago
3 0

Answer:

The price of the stock today will be $66.19

Explanation:

To calculate the price of a stock whose dividends will grow at a constant rate forever is calculated using the constant growth model of dividend discount model approach. To calculate the price of the stock today using this model, we use the following formula,

P0 = D1 / r - g

We will first calculate the price of the stock at t=8 using D9 because we use the next period's dividend to calculate the price of a stock. We will then discount back the price at t=8 to today's price.

P8 = 14.25 * (1+0.06)  /  (0.14 - 0.06)

P8 = $188.8125

The price of the stock today will be,

P0 = 188.8125 / (1+0.14)^8

P0 = $66.189 rounded off to $66.19

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alexandr1967 [171]

Answer:

total cost to be accounted = $294,000

Explanation:

Work in Process

Beginning value of WIP = $24,000

Ending value of WIP = $13,000

Cost added to production = $283,000

Cost to be accounted for = Beginning value of WIP + Cost added to production - Ending value of WIP

Cost to be accounted for = $24,000 + $283,000 - $13,000 = $294,000

5 0
3 years ago
(Problem 1b.) Determine the amount of consumer surplus generated in the following situation. Alberto goes to the CD store hoping
Alenkinab [10]

Answer:

$0

Explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the product.

Consumer surplus = willingness to pay - price

$30 - $30 = $0

Ihope my answer helps you

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3 years ago
Which describes the qualifications for someone in Law Enforcement Services?
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Answer: Communication skills for interviewing citizens, and confidence in challenging criminal behaviour.

Explanation:

A person working in law enforcement needs to be able to convince citizens that they are working in their best interest. They need to know how to communicate effectively with people so as to get information from them and build trust.

They should also be brave enough to confront crime when needed because their main purpose is to keep people safe.

8 0
3 years ago
In the infamous Coke-New Coke taste test, 54 percent of consumers, using a blind taste test, preferred the New Coke formula to t
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In the infamous Coke-New Coke taste test, 54 percent of consumers, using a blind taste test, preferred the New Coke formula to the existing formulation. This is an example of a Survey marketing research method.

The systematic collection, recording, and analysis of qualitative and quantitative data about problems related to the marketing of goods and services is known as marketing research. The objective is to determine and evaluate how shifting aspects of the marketing mix affect consumer behavior.

Although there are numerous ways to conduct market research, the majority of companies employ one or more of the following five fundamental techniques: surveys, focus groups, in-person interviews, observation, and field tests. Which strategies you use for your organization will depend on the kind of data you require and how much money you are willing to pay.

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2 years ago
Consumers know that some fraction x of all new cars produced and sold in the market are defective. The defective ones cannot be
frez [133]

Answer:

x=0.25

Explanation:

Assuming that consumers value every non-defective car at $10,000 each, only defective used cars are for sale. Therefore, consumers value defective cars at $2,000.

The expected value of a new car is given by the defective new car rate (x) multiplied the defective value, added to the non-defective car rate (1-x) multiplied by the non-defective car value.

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The fraction x is 0.25. That is, 25% of new cars sold are defective.

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