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9966 [12]
3 years ago
5

Far Side Corporation is expected to pay the following dividends over the next four years: $13, $12, $6, and $3. Afterward, the c

ompany pledges to maintain a constant 0.01 growth rate in dividends forever. If the required return on the stock is 0.12, what is the current share price?
a. $87.60.
b. $94.61.
c. $85.34.
d. $92.52.
e. $89.83.
Business
1 answer:
Fudgin [204]3 years ago
4 0

Answer:

e. $89.83

Explanation:

Calculation to determine the current share price

First step is to calculate the Value after year 4 using this formula

Value after year 4=(D4*Growth rate)/(Required rate-Growth rate)

Let plug in the formula

Value after year 4=(4*1.05)/(0.1-0.05)

Value after year 4=$84

Now let calculate the current share price using this formula

Current share price=Future dividend and value*Present value of discounting factor(rate%,time period)

Let plug in the formula

Current share price=16/1.1+12/1.1^2+7/1.1^3+4/1.1^4+84/1.1^4

Current share price=$89.83(Approximately)

Therefore the current share price is $89.83

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Felix Incorporated has just exchanged 1,250 shares of $65 par-value preferred stock for a parcel of land advertised for a price
Anna11 [10]

Answer:

Dr Land account 90,000

Cr Preferred Stock account 81,250

Cr Paid-in Capital in Excess of Par Value - Preferred Stock account 8,750

Explanation:

When preferred stock is sold, the transaction must be recorded at par value in the preferred stock account. Any amount of money received over par value, must be recorded in the paid-in capital in excess of par value - preferred stock account.

7 0
4 years ago
Upland Motors recently paid a $1.48 per share annual dividend. Dividends are expected to increase by 2.5 percent annually. What
gregori [183]

Answer:

$13.19

Explanation:

Data given

Annual dividend = $1.48

Increase percentage annually = 2.5%

Discount rate percentage = 14%

The computation of price is shown below:-

Price = Dividend ÷ (Cost of equity - Growth rate)

= ($1.48 × 1.025) ÷ (0.14 - 0.025)

= $1.517 ÷ 0.115

= $13.19

Therefore for computing the price we simply applied the above formula.

3 0
4 years ago
Shawna has added up all her current expenditures and revenues and developed a plan for what she wants to do with all of her cash
jeka57 [31]

Answer:

Shawna needs to consult with a financial advisor to make sure she has not missed any details.

5 0
3 years ago
Which of the following materials could be potentially infected with bloodborne pathogens, assuming they are not mixed with human
Katena32 [7]

Answer:

Semen or vaginal secretions

Explanation:

"Bloodborne pathogens" refer to microorganisms that can be found in the blood or body fluids of humans. There are many kinds of bloodborne diseases such as <em>Hepatitis B</em> and<em> Hepatitis C</em> as well as <em>Human Immunodeficiency Virus (HIV).</em> They can be transmitted to another person through <em>having contact with the infected human blood or body fluids.</em>

Assuming that the materials above are not mixed with human blood (meaning, they are not contaminated with blood), then the semen or vaginal secretions are the only materials where the bloodborne pathogens can be transmitted. Thus, it is important <u>not to have sexual contact with the contaminated person such as people with HIV.</u>

So, this explains the answer.

4 0
4 years ago
During group meetings, Douglas is never able to discuss his idea for reducing energy usage in the office. He has a detailed, wel
oee [108]

Answer: B) controlling the agenda

Explanation: During group meetings, Douglas is never able to discuss his idea for reducing energy usage in the office. He has a detailed, well thought out plan for how to accomplish this. He thinks it is a really great idea that can save the company money. But, within the current context, he does not even have a chance to share his ideas. Douglas should focus his efforts on ________. A) researching his idea more B) controlling the agenda C) finding out how his employees view him D) asking outside sources to validate his idea

Douglas would better benefit from controlling the agenda of the meeting so he is better able to pitch forward his well thought out idea concerning reducing energy usage in the office.

5 0
3 years ago
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