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adoni [48]
3 years ago
15

Dividends at FSL are expected grow at a rate of negative 5.4% per year (the dividends are getting smaller). The stock just paid

a dividend of $3.93 per share, and investors require a return of 13% to invest in the company. What is the expected price of the stock next year?
Business
1 answer:
Crank3 years ago
5 0

Answer:

$21.37

Explanation:

g = -5.4%

D0 = $3.93

D1 = D0 (1+g)

D1 = 3.93*(1-0.054)

D1 = 3.93*0.946

D1 = 3.71778

Investors require a return (ke) of 12%

P0 = D1/(ke - g)

P0 = 3.71778 / (12% - (-5.4%)

P0 = 3.71778 / (12% + 5.4%)

P0 = 3.71778 / 17.4%

P0 = 3.71778 / 0.174

P0 = 21.3665517

P0 = $21.37

So, the expected price of the stock next year is $21.37.

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If Mikael decides to go out with his friends instead of study for his biology test, what is the opportunity cost?
denis-greek [22]

Answer:

Studying his biology test

Explanation:

opportunity cost refers to the cost of the forgone alternative inorder to enjoy another service

7 0
3 years ago
Viserion, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 25 years to maturity that is
Snezhnost [94]

Answer:

Pretax    =  5.61%

After tax = 4.26%

Explanation:

The cost of debt will be the Yield to maturity of the bonds.

91 = present values of the 25 year annuity + present value of the maturity

There is no formula for exact YTM

we can either use excel or calculate by approximation:

In this case we will calcualte the YTM by aprroximation

YTM = 2\times (\frac{C + \frac{F-P}{n }}{\frac{F+P}{2}})

C= 25 cuopon payment 1,000 x 5% / 2 becayse paymenr are semiannually

F= 1000 the face value is 1,000

P= 910  the present value or market value is 91% of the face value

n= 50   25 year at 2 payment per year

YTM = 2 \times (\frac{25 + \frac{1000-910}{50 }}{\frac{1000+910}{2}})

dividend 26.8

divisor 955

YTM 5.6125654%

This will be the pretax cost of debt

then we calculate the after tax cost of debt

pre-tax cost of debt ( 1 - t ) = after-tax

5.61% ( 1 - .24 ) = 4,2636

6 0
3 years ago
An internet consulting company uses its website to allow its corporate clients to obtain information, analyze data, and ask ques
FromTheMoon [43]
<span>this consulting company is using a b2b model.
B2b stands for business to business., it means that all the transactions that is made through this model will be done by a producer/company to another producer/company, usually b2b products took form in some sort of service that make it easier for another company to serve its customers.
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6 0
3 years ago
Which of the following can be classified as data flow for a book store?
marishachu [46]
<span>C.) The amount of money earned in a week being invested in new book purchase

Hope this helps!</span>
5 0
2 years ago
Christie operates a small cookie business. what type of income does she earn? a. earned income b. unemployment income c. investm
faust18 [17]

So, the correct option is A (Earned income)

Small Business

Generally speaking, a small business is a privately held corporation, partnership, or sole proprietorship with fewer employees and lower yearly income than a corporation or regular-sized business. In terms of being eligible for government assistance and advantageous tax treatment, the meaning of "small" differs by nation and sector. According to a set of criteria based on particular industries, the U.S. Small Business Administration determines what constitutes a small business.

To learn more about Small Business

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#SPJ4

5 0
1 year ago
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