1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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.

You might be interested in
Is it possible to make homogeneous shopping product into a heterogeneous shopping product? think about flat-panel televisions an
schepotkina [342]
No. I think it is not possible
3 0
3 years ago
In the securitization process, mortgages are pooled together and cash flows are packaged into securities to be sold in the secon
Viefleur [7K]

Answer:

conduits

Explanation:

A mortgage-backed security is one in which is similar to bonds but that usually consists of home loans ought from banks that issued them. It is a type asset-backed security which can be sold through brokers.

investment in mortgage-backed assets means the investor is lending out his money to people that intend to get a home.

A mortgage-backed security can be bought directly from banks or through brokers. These brokers are also called conduits.

Cheers

7 0
3 years ago
Eric enjoys making pizza. When he makes pizza for his friends, sometimes Eric cares about how the pieces are distributed, and so
sammy [17]

Answer:

equity:

-He cuts the pie into eight equal slices.

-He cuts the pie into many slices so that everyone gets a piece.

Efficiency:

-He lets one person eat the whole pie.

-He makes sure that the whole pie is eaten.

Explanation:

Equity deals with distribution i.e to ensure things are equally distributed

While

Efficiency is trying to make sure things are completely used up i.e act of preventing waste

3 0
3 years ago
Smith buys and sells equity securities. On December 15, 2021, Smith purchased $542,000 of Jones shares and elected the fair valu
zimovet [89]

Answer:

$46,000

Explanation:

We can find out the the revaluation gain that need to be reported at the year end by just deducting the the cost of the investment by its current fair value .

DATA

Fair value = 588,000

Cost = 542,000

Revaluation gain = Current fair value - Cost

Revaluation gain = 588,000 - 542,000

Revaluation gain = $46,000

The revaluation gain of $46,000 will be reported in other compreensive income of smith's financial statements.

4 0
3 years ago
Zheng invested $100,000 and Murray invested $200,000 in a partnership. They agreed to share incomes and losses by allowing a $60
kifflom [539]

Answer:

$57500 to Zheng and $ 47500 to Murray  

Explanation:

   

Allocation of Net income            Zheng            Murray            Total

                                           

Total Net income                                                                    105000

Less: Salary allowance                60000         40000    -100000  

Remaining income                                                              5000

Less: Interest on capital 10%         10000              20000    - 30000

Remaining Loss                                                                      -25000

Share equally                          -12500           -12500        25000

Share of partners                   57500                47500           0

8 0
3 years ago
Other questions:
  • Emerging adults are in a high-risk category for _____.
    12·1 answer
  • City residents were recently surveyed about issues of importance in their neighborhoods. Most agreed that crime was a big concer
    11·2 answers
  • Minarski Electronics sells computers and provides hardware maintenance services. On April 1st, Minarski sold a package deal cont
    14·1 answer
  • Barr Corp. started a long-term construction project in 20X0. The following data relate to this project: Contract price $4,200,00
    9·1 answer
  • A binding minimum wage will increase the income of Question 7 options: A. all workers. B. potential workers seeking employment.
    15·2 answers
  • The return on shareholders' equity for... Income statement: 2018 Sales $ 2,500,000 Cost of goods sold 1,300,000 Net income 200,0
    6·1 answer
  • IKEA’s ""ready to assemble"" furniture and fixtures transformed retail shopping; Nike allows online customers to design their ow
    11·1 answer
  • Terra is the owner of Arcadia Salon and Spa and is looking to add some new spa services. Terra interviewed her staff to get thei
    14·1 answer
  • One term is used to identify a collection of activities designed to gain access to personal and corporate information. The activ
    15·1 answer
  • Nolen is a key team member of a successful small business. his colleagues appreciate nolen meeting his deadlines. which of the c
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!