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vitfil [10]
2 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]2 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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On January 1, 2020, Ann Price loaned $187825 to Joe Kiger. A zero-interest-bearing note (face amount, $250000) was exchanged sol
igomit [66]

Answer:

$18,783

Explanation:

Ann Price loaned to Joe Kiger × Rate of Interest

Ann Price loaned to Joe Kiger$187,825

Rate of Interest 10%

Hence;

$187,825 × .10

= $18,783

Therefore amount of interest income should Ms. Price recognize in 2020 will be

$18,783

6 0
3 years ago
The New York Times (Nov. 30, 1993) reported that "the inability of OPEC to agree last week to cut production has sent the oil ma
slega [8]

Answer: The correct answer is a. true.

Explanation: If there is a supply glut and demand is falling, there will definitely be a fall in price. The same principle applies if Organization of Petroleum Exporting Countries (OPEC) disagree to cut production, price for domestic crude oil would fall.

The scenario above is similar to the recent happenings regarding the impacts of coronavirus on global economy and is very fresh in our memories. According to the TheNation Newspapers, "oil prices tanked more than seven per cent at the weekend to their lowest levels since mid-2017 after Russia balked at OPEC's proposed steep production cuts to stabilize prices."

OPEC is proposing a cut in oil production, but if this is not done, the impact on Brent would be devastating as the price would fall further.

6 0
3 years ago
What is the equity beta for a firm with asset beta equal to 0.9, and D/E ratio of 0.4, and tax rate equal to 35%?
NNADVOKAT [17]

Answer:

the equity beta of the firm is 1.134

Explanation:

The computation of the equity beta is shown below:

Equity beta is

= Asset beta × [1 + (1 - tax rate) × Debt-equity ratio]

= 0.9 × [1 + (1 - 0.35) × 0.4]

= 0 9 × 1.26

= 1.134

Hence, the equity beta of the firm is 1.134

We simply applied the above formula so that the correct value could come

And, the same is to be considered

3 0
2 years ago
A company plans to sell 5,700 units in June. The company has 855 units in beginning inventory and has a target of 900 ending inv
Katarina [22]

Answer:

5,745 units

Explanation:

As we know that

Number of units produced = Estimated units sold + ending inventory units - beginning inventory units

= 5,700 units + 900 units - 855 units

= 5,745 units

We simply added the ending inventory units and deduct the beginning inventory units to the Estimated units sold so that the number of units produced could come.

4 0
3 years ago
Low-income students are less likely to benefit from parental involvement because?
Misha Larkins [42]

The working class is more committed to their jobs and less likely to Low-income students are less likely to benefit from parental involvement. The simple solution is to submit to American authority: A person who falls within the definition of a "low-income individual".

Is one whose family's taxable income for the prior year did not exceed 150 percent of the federal poverty line. That comes to about $19,000 in the United States (Hawaii and Alaska have a somewhat higher value). If involvement of a household's income is less than 60% of the median income in the UK, it is considered to be low income.

To learn more about Low-income, click here.

brainly.com/question/13068575

#SPJ4

7 0
1 year ago
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