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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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Wheldon Wheels Inc. (WW) is a US-based manufacturer that exports car parts to Taiwan. WW expects to receive 20,000,000 Taiwan do
ra1l [238]

Answer: Enter into a futures contract

Explanation:

Wheldon Wheels inc. operates in the United states, The company exports car Parts to Taiwan which means they do business with companies in Taiwan. The amount that Wheldon Wheels inc receives when they export car parts depends on the Exchange rate between a US dollar and Taiwan Dollar.

Exchange rates between currencies fluctuates every day in the market which presents a problem of uncertainty because when exchange rate changes the value of the transaction changes and that will increase or decrease a company's profits in each transaction.

Wheldon Wheels Expects to receive 20 000 000 Taiwan dollars in 90 days, since the company is in The united states the amount of 20 000 000 of Taiwan Dollars Receivable will need to be converted into US dollars. The Problem is, The exchange rate may decrease or increase in the next 90 days which will affect how much Wheldon Wheels receives in dollars.

Wheldon Wheels inc may Protect them selves against Exchange rate Fluctuations by entering into A Future Contracts with a Bank or exchange dealer. Futures Contract will provide Wheldon Wheels inc with an opportunity to sell 20 000 000 Taiwan Dollars in 90 days at a fixed predetermined exchange rate. The Dealer Promises to Buy 20 000 000 Taiwan Dollars in 90 days at a Predetermined Fixed exchange rate.

example

suppose the (WW) enters into a Futures contract to sell 20 000 000 Taiwan Dollar in 90 days at an Fixed exchange rate of $1 = 1.5 Taiwan dollar, if the market exchange rate in 90 days is $1 =  1.3 Taiwan dollar Wheldon Wheels inc would be protected. The Exchange rate for the 20 000 000 Taiwan Dollar transaction would remain at $1 = 1.5 Taiwan dollar

5 0
3 years ago
Read 2 more answers
Sanchez Company's output for the current period was assigned a $419,000 standard direct labor cost. The direct labor variances i
skad [1K]

Answer:

the actual total direct labor cost for the current period is $425,285

Explanation:

<u>Reconciling Standard Cost to Actual Cost</u>

Standard Cost                                                          $419,000

<em>Add</em> Unfavorable direct labor rate variance             $10,475

<em>Less</em> Favorable direct labor efficiency variance       ($4,190)

Actual Cost                                                               $425,285

3 0
3 years ago
Communication with the public and employees should be overseen by the director of PR. The duties of the crisis team should be di
Veseljchak [2.6K]

Answer: The third option (option C) is the right answer.

Explanation:

The paragraph which has the best coherence is option C. This is because in the case of the third option, it explains that the flow of ideas is constant from one sentence to another.

The first sentence serves as an introduction which talked about the reasons why duties should be divided based on each member’s expertise. The sentences moved smoothly and also logically from one sentence to another sentence. An example is the sentence that “if your company does not have a public relations executive…..”. This should logically proceed the sentence that says that communication ought to be overseen by the director of PR.

This shows that the third option possesses a consistent and logical train of thought as well.

3 0
3 years ago
Mr. Boyd and Ms. Tuck decide to form a new corporation named BT Inc. Mr. Boyd transfers $10,000 cash and business inventory ($20
kicyunya [14]

Answer:

1. Mr Boyd's share = 400, Ms Tuck = 800

2. Mr Boyd's realised gain = $16,800, recognized gain = $0, basis = $13200

Ms Tuck's realized gain = $18500, gain recognized = 0, basis = $41500

Explanation:

1.

Total share = $1200

Cash received from Mr Boyd = 10000

FMV from him = 20000

Total value = 30000

FMV of equipment from Ms Tuck = 60000

Total value from both of them = 60000 + 30000 = $90000

Number of share Mr Boyd is to receive = 1200x(30000/90000)

= 400

Number of share Ms Tuck is to receive

= 1200x(60000/90000)

= 800

2.

<u>Mr Boyd's gains</u>

Cash received = 10000

FMV = 20000

Total = 30000

Adjusted basis = 3200

Total tax basis = 10000+3200

Gain realized = 30000-13200

= 16800

Gain realized = 0 because it is a non taxable exchange.

Mr Boyd's realised gain = $16800, recognised gain = $0, basis = $13200

<u>Ms Tuck</u>

FMV = 60000

Adjusted tax basis = 41500

Gain realized = 60000-41500

= 18500

Gain recognized = 0(non taxable exchange)

Ms Tuck's realized gain = $18500, recognized gain = $0, basis = $41500

3

the FMV basis of inventory = 20000

carryover basis = 3200

equipment basis FMV = 60000

carryover basis = 41500

note that no gain if equal to or more than 80 percent of the ownership of the stock in a non taxable exchange.

6 0
3 years ago
Bart is a lawyer and an employee of Alway, Inc. Bart is representing Alway in its purchase of Steel Co. Bart learns from Alway's
Vinil7 [7]

Answer:

C. be held liable under the misappropriation theory of insider trading.

Explanation:

Insider trading refers to the practice of utilizing confidential information that is not available for the public in order to make a profit in stock market. Currently, this action is deemed as illegal ever since the  The Insider Trading Sanctions Act was created in  1984 .

The Security and Exchange omission created that act in order to ensure that no investors have to experience unfair situation in the market . Having confidential information will make it really easy for a person to predict whether the price of the stock will go up or down.

This can be seen In Bart's action. Pay attention to this part of the excerpt:

<em>Bart learns from Alway's company files that Steel Co. is in the final stages of negotiation for a highly profitable </em>

6 0
3 years ago
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