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vitfil [10]
3 years ago
6

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 22 percent for the next three years, with the growth

rate falling off to a constant 5 percent thereafter. If the required return is 12 percent, and the company just paid a dividend of $2.35, what is the current share price
Business
1 answer:
Temka [501]3 years ago
7 0

Answer:

53.98

Explanation:

current share price is the present value of dividends

Year 1 = 2.35 x 1.22 = 2.867

Year 2 = 2.867 x 1.22 = 3.50

Year 3 = 3.50 x 1.22 = 4.27

+ 4.27 x 1.05 / (0.12 - 0.05) = 64

I - 12%

PV = 53.98

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

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he Clark Company fails to record these two adjusting journal entries: Depreciation on Equipment: $10 Cash Dividends declared: $4
tensa zangetsu [6.8K]

Answer:

Working Capital will be overstated by the amount of $40.

Explanation:

Of the two the adjusting entries, we need to identify the adjusting entry that affects any element of Working Capital (Current Assets or Current Liability).

Depreciation Entries include : Debit Depreciation Expense (Expense)  $10 and Credit Accumulated Depreciation  $10.

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Thus, the Liabilities will be understated due to omission of Cash Dividends Declared Entries.

Subsequently, Working Capital will be overstated by the amount of $40.

8 0
3 years ago
Consumers who refuse to sacrifice style, but achieve it on a budget are called ________.
MaRussiya [10]
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4 0
4 years ago
Free rein leaders can be described as:
kodGreya [7K]

Answer:

It is C. Democratic

Explanation:

It is Democratic, because free rein leaders can be described as

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This tells you that Free rein leaders can be described as Democratic

5 0
4 years ago
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dybincka [34]

Answer:

a. The marginal revenue curve and the demand curve would coincide.

Explanation:

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6 0
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Read 2 more answers
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