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Irina-Kira [14]
2 years ago
13

An investor is considering investing in a stock they plan to hold for 2 years. The stock is expected to pay dividends of $1.50 p

er share in each of the 2 years and sell for $20 at the end of two years. If the investor requires an 8% return on this stock, how much should they pay for it using the Dividend Discount Model?
Business
1 answer:
xz_007 [3.2K]2 years ago
3 0

Answer: $19.82

Explanation:

The price the investor would be willing to pay today would be the present value of the dividends and the selling price at the end of 2 years using the required return as the discount rate.

= 1.50 / (1 + 8%)  + 1.50 / (1 + 8%)²   + 20 / (1 + 8%)²

= 1.3888889 + 1.286 + 17.1467764

= $19.82

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Use your knowledge of balance sheets, what are the total liabilities and retained earnings in the text below, respectively? ASSE
Vera_Pavlovna [14]

Answer:

B) 280,000; 200,000

Explanation:

Assets = Liabilities + Shareholder Equity

Assets:

Cash                              $50,000

Accounts receivable    $80,000

Inventory                     $100,000

Gross P&E                   $730,000

<u>depreciation               ($130,000)</u>

total                          = $830,000

Liabilities:

Accounts payable         $12,000

Notes payable              $50,000

<u>Long-term debt           $218,000 </u>

total                          = $280,000

Equity = $830,000 - $280,000 = $550,000

Common stock            $100,000

Add. paid-in capital    $250,000

Retained earnings = $550,000 - $100,000 (common stock) - $250,000 (APIC) = $200,000

3 0
2 years ago
Use the information in the chart to calculate the real exchange rate between the U.S. dollar and the Indian rupee. Round to the
JulsSmile [24]

Answer: 52.51 rupees/dollar

Explanation:

The real exchange rate attempts to account inflation in the countries being compared by using prices in the exchange rate.

The formula for calculating it is;

Real exchange rate = Nominal exchange rate *(Price index of domestic country/Price index of foreign country)

Real exchange rate in 2014 = 57*(99.5/108)

= 52.51 rupees/dollar

3 0
3 years ago
Trisha makes purses out of old blue jeans and sells them to customers at local craft fairs. what type of marketing channel does
Anettt [7]

Answer:

Direct.

Explanation:

No intermediaries are used to provide goods and services to customers . Typically seller is the manufacturer or an individual.

5 0
3 years ago
question 1 you are presenting your theory about the correlation between recent sales increases and a current pop culture trend.
Sveta_85 [38]

The opening or introduction of your presentation is the ideal time to introduce the hypothesis. The tentative solutions are important about the presentation.

<h3 /><h3>What is a hypothesis?</h3>

A hypothesis is a theory that is put up as a potential explanation for a certain circumstance or condition but has not yet been shown to be true. Scientists can design a straightforward laboratory experiment to verify this theory.

In the context of science, a hypothesis is an assertion based on current knowledge that is appropriate for describing a particular phenomenon but whose validity has not been established or has not been independently tested.

Typically, the researcher's hypothesis is referred to as the alternative hypothesis, and any other result is referred to as the null hypothesis, or, more simply put, the opposite result from what was predicted.

Learn more about hypothesis, here

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7 0
1 year ago
West Company borrowed $10,000 on September 1, Year 1 from the Valley Bank. West agreed to pay interest annually at the rate of 6
Setler [38]

Answer:

The correct answer is $200

Explanation:

The interest expense appearing on the company's income statement in year 1 is for  a period of four months(September to December) year 1.

The interest expense using an annual rate of 6% is computed thus:

interest expense=$10,000*6%*4/12=$200

The correct option is $200 which is not one of the options provided,hence the options need.

In another version of the question,option D was $200 which shows is missing here,

All in all, the correct answer is $200 interest for a period of four months from September to December

8 0
2 years ago
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