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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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bixtya [17]

Answer:

D. is the rate that banks charge each other for​ short-term loans of excess reserves.

Explanation:

The federal reserves require banks to maintain a certain amount in their vaults to cater for possible withdraws.  At the close of business every day, banks have to confirm they have the required amount. Should a bank fail to meet the requirement, it can borrow from other banks that have a surplus. The interest rate that banks charge each other for these transactions is the fed fund rate.

The Fed set the fund rate. It may increase or decrease it depending on the prevailing market condition. The banks use the fund rate set to determine the interest rates to be charged on loans and mortgages. A high fund rate means high-interest rates.

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3 years ago
Atlantic Coffee has recently decided to raise its prices by10%.It was shocked by itscustomers' reactionto the price increase whe
miss Akunina [59]

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5 0
1 year ago
Which of the following set the first minimum wage? The Taft-Hartley Act of 1947 The AFL-CIO The Norris-LaGuardia Act of 1932 The
lara31 [8.8K]

Anscbhbdvbfvbfhb

Explanation:

6 0
3 years ago
) What is the definition of business research? A) The process of analyzing secondary information and providing executives with t
Alisiya [41]

Answer:

The correct answer is option D) The process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem.

Business research can help organizations to come up with solutions that can help them grow out of problems related to any section of the business. Enough data needs to be collected so the problem can be analysed properly and the solution can be figured out in a productive manner.

6 0
3 years ago
On August 1, Year 1, SuperCool Software (SCS) began developing a software program to allow individuals to customize their invest
Bess [88]

Answer:

$180,000

Explanation:

Calculation to determine the required amortization for Year 2

(1)Using Percentage-of-revenue method

Percentage-of-revenue method=($2,000,000/$10,000,000)*$900,000

Percentage-of-revenue method= 20% *$900,000

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(2) Using Straight-line method

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Straight-line method= $135,000

Therefore based on the above calculation the required amortization for Year 2 will be $180,000 using The percentage-of-revenue method reason been that the method help to produces higher amortization of the amount of $180,000.

6 0
3 years ago
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