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saveliy_v [14]
2 years ago
7

Monogramm just paid a dividend of $2.19 per share. The company said that it will increase the dividend by 15 percent and 10 over

the next two years, respectively. After that, the company is expected to increase its annual dividend at 3.7 percent. If the required return is 10.7 percent, what is the stock price today
Business
1 answer:
valentinak56 [21]2 years ago
7 0

Answer: $38.03

Explanation:

Based on the information given in the question, dividend for first year will be:

= D1 = $2.19 × 1.15 = $2.5185

D2= $2.5185 × 1.1 = $2.77035

Then, we calculate the value after year 2 which will be:

=(D2 × Growth Rate) / (Required Return-Growth Rate)

=(2.77035 × 1.037) / (0.107-0.037)

=$41.04

Therefore, the stock price today will be:

= (2.5185/1.107) + (2.77035/1.107²) + (41.04)/1.107²

=$38.03

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Baylor Service Corp. redeemed $1,000 of gift cards that customers used to pay for services that were performed by the company. T
Nitella [24]

Answer:

B. Unearned Revenue and a credit to Service Revenue.

Explanation:

The adjusting entry is given below:

Unearned revenue $1,000

         To Service revenue $1,000

(Being service revenue is recorded)

Here unearned revenue is debited as it decreased the liabilities and credited the service revenue as it increased the revenue

Therefore the option b is correct

7 0
3 years ago
A firm is considering two mutually exclusive projects, X and Y, with the following cash flows:
Murrr4er [49]

Answer: MIRR (project x ) = 3.42% , Project Y = 4.51%

Explanation:

Modified internal Rate of return

Project X

Period (n) = 4

Weighted Average Cost of equity(WACC) = 8.0%

Cash out flow = -$1000

Cash Inflows = $100 year 1 , $280 year 2 , 370 year 3 ,$700 year 4

Present Value Cash Inflows = PVCIF = Cash Inflow/(1+WACC)^n

PVCIF = 100/(1+0.08)^1 + 280/(1+0.08)^2 + 370/(1+0.08)^3 + $700/(1+0.08)^4

PVCIF = 95.592592593 + 240.05486968 + 293.71792918 + 514.5208969

Present Value of Cash inflows (PVCIF) = $1143.8862884

Present Value of Cash out flows(PVCOF) = -$1000

Modified Internal Rate of Return (MIRR) = \sqrt[n]{\frac{PVCIF}{PVCOF} } -1  

Modified Internal Rate of Return (MIRR) = \sqrt[4]{\frac{1143.8862884}{10000} } -1

Modified Internal Rate of Return (MIRR) = 0.034178971

Modified Internal Rate of Return (MIRR) = 3.41789971 = 3.42%

Project Y

Period (n) = 4

Weighted Average Cost of equity(WACC) = 8.0%

Cash out flow = -$1000

Cash Inflows = $1100 year 1 , $110 year 2 , $50 year 3 ,$55 year 4

Present Value Cash Inflows = PVCIF = Cash Inflow/(1+WACC)^n

PVCIF = $1100/(1+0.08)^1 + $110/(1+0.08)^2 + $50/(1+0.08)^3 + $55/(1+0.08)^4

PVCIF = 1018.5185185 + 94.307270233 + 39.691612051 + 40.42641904

Present Value of Cash inflows (PVCIF) = $10192.9438198

Present Value of Cash out flows(PVCOF) = -$1000

Modified Internal Rate of Return (MIRR) = \sqrt[n]{\frac{PVCIF}{PVCOF} } -1  

Modified Internal Rate of Return (MIRR) = \sqrt[4]{\frac{1192.9438198}{10000} } -1

Modified Internal Rate of Return (MIRR) = 0.0450931421

Modified Internal Rate of Return (MIRR) = = 4.50931421 = 4.51%

4 0
3 years ago
Win Goods Inc. is a large multinational conglomerate. As a single business unit, the company's stock price is estimated to be $2
timama [110]

Answer: Upon realizing that they maintain business units that are not included in their results and generate a greater benefit, it could be indicated that Win Goods Inc should review their financial performance, because for some reason their separate business units are having a better market valuation. This study may indicate that they should consolidate their results so that the Group's shares are unified in the market.

5 0
3 years ago
The price of a competitive firm's product is $50 per unit. The firm currently has marginal cost equal to $40. To maximize profit
Karo-lina-s [1.5K]

Answer:

should increase its output

6 0
2 years ago
How does a strong economy affect the demand for goods and services
Brut [27]

Answer:

yes true ik it is i got it wrong when i said false

7 0
3 years ago
Read 2 more answers
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