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
kondaur [170]
3 years ago
14

Sultan Services has million shares outstanding. It expects earnings at the end of the year of million. Sultan pays out​ 60% of i

ts earnings in total​ - 40% paid out as dividends and​ 20% used to repurchase shares. If​ Sultan's earnings are expected to grow by ​% per​ year, these payout rates do not​ change, and​ Sultan's equity cost of capital is ​%, what is​ Sultan's share​ price?
Business
1 answer:
sukhopar [10]3 years ago
7 0

Answer: $73.33

Explanation:

Dividend discount model can be used to calculate the value of the shares:

= Earnings paid out / (Cost of equity - growth rate)

Earnings to be paid out:

= 60% * 5,500,000

= $3,300,000

Value of shares:

= 3,300,000 / ( 9% - 6%)

= $110,000,000

Share price:

= Value of shares / Number of shares outstanding

= 110,000,000 / 1,500,000

= $73.33

You might be interested in
A recent annual report for FedEx contained the following data:
Maru [420]

FedEx

Accounts Receivable Turnover

Numerator Net Credit Sales = 35,687 = 9.02 times

Denominator Average Accounts Receivable (4415+ 3495)/2

Average Daily Accounts Receivable Turnover

Numerator Days in 4 Years = 0.365 4 4 = 46 debt turnover ratio of 9.02

Credit is generally defined as an agreement between a lender and a borrower. Credit also refers to the creditworthiness or credit history of an individual or entity. In accounting, loans can reduce assets or increase liabilities, and can reduce expenses or increase income.

In personal banking or financial accounting, a credit is an entry indicating that money has been received. Normally, a checking account register has the balance (deposits) on the right and the debits (money spent) on the left. In a loan, all the requested amount is given at once at the time of lending, whereas in a loan, the bank uses the full amount of the loan to give the customer an amount that can be used as needed.

Learn more about Credit here brainly.com/question/26867415

#SPJ4

7 0
1 year ago
The slope of the demand for loanable funds curve represents the...
USPshnik [31]

Answer: c. negative relation between the real interest rate and saving.

Explanation: Savings belong to what an economy saves from its income, which in turn represents national savings. We also have the investment and the net capital flow. The balance is reached when the amount of savings equals investment and net capital flows or demand for loanable flows.

Therefore, we can say that the demand is negative when interest rates rise, since this retracts the economy and decreases the savings and thus the money available to lend.

7 0
3 years ago
Why does a small difference in economic growth result in a large difference in wealth over time?
larisa [96]

Answer:

The correct answer is the option C: Because the effect of compounding allows growth to build upon previous growth.

Explanation:

To begin with, the term of <em>"Compounding"</em> in economics refers to the situation in which an assets' earnings are reinvested to generate more additional earnings over the pass of time and therefore that in an economy when there is a small growth the investors take advantage of the effect that the compounding has over the situation and use it in order to generate more earning in the future and that is why that the the effect of compounding allows growth to build only upon previous growth.

7 0
3 years ago
Your credibility is your capability of being believed because you are reliable and worthy of confidence.
QveST [7]

yes, agreed and proven.

7 0
3 years ago
If you are working on a highly energetic reaction, and you need to evacuate, what should you do
babunello [35]
The answer for this question is: Stabilize the reaction
Chemicals with highly energetic reaction will have more risk to create high-energy force if we somehow fail to contain it safely.
When you need to evacuate, this type of reaction could create an explosion, so it's really advised to stabilize the reaction first.
8 0
3 years ago
Other questions:
  • What two task does a public affairs officer do?
    10·1 answer
  • Why do most markets in the real world fall somewhere between perfect competition and monopoly?
    7·1 answer
  • The following amounts were taken from the financial statements of Ando Company: 2017 2016 Total assets $800,000 $1,000,000 Net s
    5·1 answer
  • If the marginal benefit of consuming another unit of a good is positive, then to reach the allocatively efficient level of outpu
    11·1 answer
  • Which of the following business combinations is a vertical integration? A. The corner gas station buys the competitor across the
    5·1 answer
  • Levin Furniture buys a living room set with a $4,000 list price and a 55% trade discount. Freight (FOB shipping point) of $50 is
    5·1 answer
  • Materials in the raw materials account do not become direct materials a.until they are purchased from a vendor. b.until they are
    8·1 answer
  • Select the qualification that is best demonstrated in each example.
    13·2 answers
  • For a sales presentation, Pedro decides to use an informal tone that makes use of tasteful humor. What step of the problem-solvi
    7·1 answer
  • The double-a of american airlines, the peacock of nbc, and the apple with a missing bite of apple are examples of a _______. bra
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!