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Leona [35]
3 years ago
11

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

he firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $15 per share 10 years from today and will increase the dividend by 5 percent per year thereafter.
If the required return on this stock is 15 percent, what is the current share price?
Business
1 answer:
dimulka [17.4K]3 years ago
8 0

Answer:

$51.25

Explanation:

P9 = Next dividend / Required rate r - Growth rate g

P9 = $15 / 14% - 5%

P9 = $15 / 9%

P9 = $166.67

Po = P9 / (1 - Required rate of return)^9

Po = $166.67 / (1 + 0.14)^9

Po = $166.67 / 3.2519

Po = $51.25

So, the current stock price is $51.25.

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Answer:

c. the GDP deflator and the consumer price index.

Explanation:

Two alternative measures of the overall level of prices are the GDP deflator and the consumer price index.

The GDP deflator can be defined as a measure of the changes in prices for all of the finished goods and services produced domestically in an economy in a particular period of time, usually a year. This simply means that, the gross domestic product deflator measures the inflation in an economy.

Consumer price index (CPI) can be defined as a measure of the aggregate or average changes in price level of a weighted market basket of finished goods and services that consumers purchased over a specific period of time. The CPI is also a measure of the inflation in an economy over a specific period of time.

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In which basic market would stoves be traded?
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2 years ago
A major contribution of the Miller model is that it demonstrates, other things held constant, that ____
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2 years ago
Carlton Soup Company makes crackers, bread, and soup. Presented here are the items listed on a simplified version of its recent
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Answer:

Carlton Soup Company

Classified Balance Sheet as of July 31 (dollars in millions)

Assets

Current Assets:

Cash and cash equivalents                 $300

Accounts receivable                              595

Inventories                                             958

Other current assets                               70

Total current assets                         $1,923

Non-current assets:

Property, plant, and equipment, net 2,397

Other assets                                          132

Intangible assets                               3,023

Total non-current assets                $5,552

Total assets                                     $7,475

Liabilities and Equity

Current Liabilities:

Accounts payable                             $ 668

Accrued expenses                               599

Other current debt                            1,080

Total current liabilities                    $2,347

Other noncurrent liabilities             3,806

Total liabilities                                $6,153

Equity:

Common stock, $0.0375 par value  386

Retained earnings                             936

Total equity                                   $1,322

Total liabilities and equity            $7,475

Explanation:

a) Data and Calculations:

Cash and cash equivalents                  300

Accounts receivable                             595

Inventories                                            958

Other current assets                              70

Property, plant, and equipment, net 2,397

Other assets                                         132

Intangible assets                               3,023

Accounts payable                            $ 668

Accrued expenses                             599

Other current debt                           1,080

Other noncurrent liabilities             3,806

Common stock, $0.0375 par value  386

Retained earnings                             936

4 0
2 years ago
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