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Stolb23 [73]
2 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]2 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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when perfectly competitive firm X sells three units of product Z, its marginal revenue is $4.67. when it sells one hundred units
Ghella [55]

Answer:

B) $4.67

Explanation:

By definition marginal revenue is the revenue generated by the sale of one more unit of product Z.

Marginal revenue = unit price

Since firm X participates in a perfectly competitive market, it is a price taker, and since the marginal revenue is constant, we can assume that this is the equilibrium price of product Z.  

3 0
3 years ago
Park Sung Inc. is a fictional South Korean manufacturer of refrigerators. The company produces at its manufacturing plant in Bus
Murrr4er [49]

Answer:

The answer for each requirement is given separately below.

Explanation:

What is the economic production quantity (EPQ)?

EPQ = ((Annual Requirement * setup cost *2)/Carrying cost per unit)^(1/2)

         = ((30,000 * 50 *2)/3^(1/2)

         = 1000 Units

a. What is the average inventory level for this optimum production quantity?

Average Inventory level = EPQ/2 = 500 units

b. How many production setups would there be in a year?

Production setups = Annual Usage /EPQ = 30 set ups

C. What is the optimal length of production run in days

length of production = Total Requirement/production per day

                                   = 30,000/275

                                   =110 days approx

d. What would be the savings in annual inventory Cost if setup costs can be reduced to US$40 per setup?

If set up cost reduce to $40  than EPQ = 895

So Set up cost = 30,000/ 895 * 40 = 1,360

Carrying cost = 883/2 *3                  = 1,325

Total Cost                                          = $ 2,685 -A

If set up cost  $50  than EPQ = 1000

So Set up cost = 30,000/ 1000 * 50   = 1,500

Carrying cost = 1000/2 *3                  = 1,500

Total Cost                                          = $ 3,000- B

Saving = B-A = 315 Dollars

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a pricing tool that focuses on the changes in total revenue and total cost from selling one more unit to find the most profitabl
tigry1 [53]

A pricing tool that focuses on the changes in total revenue and total cost from selling one more unit to find the most profitable price and quantity is called Marginal analysis.

Marginal analysis is an examination of the added benefits of an activity against the incremental costs resulting from the same activity. Businesses use marginal analysis as a decision-making tool to help them maximize their potential revenue. For example, if a company has a budget to make room for another employee and plans to hire another person to work in the factory, marginal analysis indicates that hiring that person provides a net marginal benefit.

To learn more about Marginal analysis, click here.

brainly.com/question/14513809

#SPJ4

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