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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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Suppose the state of Wyoming passes a law that increases the tax on cigarettes. As aresult, smokers who live in Wyoming start pu
fomenos

Answer:

a. People respond to incentives.

Explanation:

Assuming the state of Wyoming passes a law that increases the tax on cigarettes thereby causing smokers who live in Wyoming to start purchasing their cigarettes in surrounding states.

Consequently, an increase in the tax on cigarettes altered the behavior of the smokers in Wyoming, it made them to purchase from neighboring states.

This illustrates or reflect the fact that people respond to incentives.

6 0
3 years ago
Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August, of which $212,000 w
VikaD [51]

Answer:

                                                             Dr.            Cr.  

Work in progess                              139,000

Salaries and wages payable account                139,000

Explanation:

Direct Labor are charges to work in progress account and a payble is created as a result.

Total Labor cost = $212,000

Indirect cost = $73,000

Direct labor cost = $212,000 - 73,000

Direct labor cost = $139,000

3 0
2 years ago
Read 2 more answers
While buying refreshments for an upcoming party, you notice that a six-pack of Americana Beer costs $2 and a six-pack of Bavaria
sattari [20]

Answer:

B. two six-packs of Americana Beer.

Explanation:

A. a six-pack of Americana Beer.

B. two six-packs of Americana Beer.

C. $4 and the six-pack of Americana Beer.

D. $4.

six-pack of Americana Beer = $2

six-pack of Bavarian Beer = $4

1 six-pack of Bavarian Beer = $4

1 six-pack of Americana Beer = $2

2 six-pack of Americana Beer = $4

Therefore,

1 six-pack of Bavarian Beer = 2 six-pack of Americana Beer

You buy the six-pack of Bavarian Beer

The opportunity cost of the Bavarian Beer is two six-packs of Americana Beer.

B. two six-packs of Americana Beer.

Opportunity cost is the cost of satisfying a want at the expense of another. It can also be called real cost or true cost

4 0
2 years ago
Jaycee Jeans sold 40 pairs of jeans at a price of $40. When it lowered its price to $20, the quantity sold increased to 60 pairs
grigory [225]

Answer:

The answer is: A) 0.6

Explanation:

First we will calculate the midpoint for units:

  • change in units = 40 - 60 = -20
  • average units = (40 + 60) / 2 = 50
  • midpoint for units = 20 / 50 = 0.4 (we only use positive numbers)

Now we will calculate the midpoint for price:

  • change in price = 40 - 20 = 20
  • average price = (40 + 20) / 2 = 30
  • midpoint for units = 20 / 30 = 0.67

Finally we divide 0.4 / 0.67 = 0.6

4 0
2 years ago
A customer value proposition is a unique strength relative to competitors that provides superior returns, often based on quality
balu736 [363]

<u>Product Protocol is a statement that, before product development begins, identifies (1) a well-defined target market; (2) specific customers' needs, wants, and preferences; and (3) what the product will be and do to satisfy consumers</u>

Explanation:

<u>Product protocol</u> is also termed as <u>Product definition ,Product requirement,Product deliverables.</u>

<u />

<u>A product protocol is required after the selection of the product and you are done with the Concept testing ,the preliminary  sales forecasting of the product is also completed.</u>

<u>The Product Protocol can be said to be a written document or statement  that is required by the various division of a company (like the R&D,Marketing,procurement,production departments)</u>

4 0
3 years ago
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