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seraphim [82]
3 years ago
11

PandemicsPlus just paid a dividend of $1.00 per share and they consistently grown dividends at 4% annually. Investors require a

return of 12% on the firm's equity. What is the current value of the stock?
Business
1 answer:
oee [108]3 years ago
8 0

Answer:

$13

Explanation:

The current value of the stock can be determined using the constant growth dividend model

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid

r = cost of equity

g = growth rate

(1 x 1.04) / (0.12 - 0.04) = 13

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Pessimism Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of
VladimirAG [237]

Answer:

The correct answer is option C.

Explanation:

Suppose there is pessimism in an economy because of corporate scandals, international tensions, loss of confidence, etc. This is going to adversely affect the economy. Because of corporate scandals, the investment will decline. Loss of confidence in consumers will cause a reduction in consumption spending. International tensions cause net exports to decline.  

All of this causes aggregate demand to decline. The aggregate demand curve moves to the left. This leftward shift causes both the quantity of output and price to fall. As output fall real GDP will decline as well.

3 0
3 years ago
Assume you have two projects with different lives. Project A is expected to generate present value cash flows of $5.2 million an
Alex787 [66]

Answer:

$1,033,190.69 ; better

Explanation:

Given:

Present value of cash flow of Project A (PV) = $5,200,000

Maturity (nper) = 7 years

Required return (rate) = 9%

Annual annuity (pmt) can be computed using spreadsheet function =pmt(rate,nper,PV,FV). Substituting the values, we get,

=pmt(0.09, 7, -5200000)

=$1,033,190.69

FV is 0. Present value is negative as it's cash outflow.

Annual annuity of Project A is $1,033,190.69

Project B:

Given:

Present value of cash flow of Project A (PV) = $3,800,000

Maturity (nper) = 5 years

Required return (rate) = 9%

Annual annuity (pmt) can be computed using spreadsheet function =pmt(rate,nper,PV,FV). Substituting the values, we get,

=pmt(0.09, 5, -3800000)

=$976,951.34

FV is 0. Present value is negative as it's cash outflow.

Annual annuity of Project B is $976,951.34

Annual annuity of Project is more than that of Project B, So Project A is better than Project B.

8 0
3 years ago
An example of communicating category membership by relying on the product descriptor is ford's positioning of its freestyle auto
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That statement Is true

In marketing, product descriptor refers to a structured format that displayed some information about a specific product.
In this case, ford tried to create a unique product descriptor such as "sports wagon" to tell its consumers that their product has the characteristic of a sport and a wagon
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3 years ago
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Anastaziya [24]

Answer:

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7 0
3 years ago
Frank has thirty years of service as a manager for his company. he remembers when managers had almost complete freedom to fire w
Alex787 [66]

From the described case in the question, it is clear that Frank believes in doctrine called at-will employment or employment at-will.

At-will employment is a <u>U.S term used for a condition where an employee can be fired at anytime and without any warning as long as the reason isn’t illegal by law</u>.

This type of doctrine is no longer the main doctrine used in most U.S states by the 20th century, but it was commonplace during the late 19th century.

8 0
3 years ago
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