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motikmotik
2 years ago
8

You are considering a stock that is expected to pay dividends during the next five years of $0.50, $0,52, $0,54, $0,56 and $0.58

. You estimate that you can sell the stock for $100 at the end of five years. Your required rate of return is 15% and the stock is currently selling for $65. If you purchase the stock, what rate of return do you expect to earn
Business
1 answer:
nikklg [1K]2 years ago
4 0

Answer:

9.7%

Explanation:

The rate of return can be determined using a financial calculator

Cash flow in year 0 = -65

Cash flow in year 1 = $0.50

Cash flow in year 2 = $0.52

Cash flow in year 3 = $0.54

Cash flow in year 4 = $0.56

Cash flow in year 5 = $0.58 + $100

Rate of return = 9.7%

To find the rate of return using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

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Answer: Top management

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In the above case, Geraldo is the vice president of the company and also he is responsible for determining the directions of operations of the company thus we can consider him in the top management.

7 0
3 years ago
A company had stock outstanding as follows during each of its first three years of operations: 2,500 shares of 10%, $100 par, cu
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Answer:

See the attached photo for the completed the schedule.

Explanation:

Note: See the attached photo for the completed the schedule.

In the attach excel file, the following formulae and calculations are used:

Peferred stock dividend per share = Total cumulative preferred stock dividend paid in a year / Number of cumulative preferred shares

Common stock dividend per share = Total common stock dividend paid in a year / Number of common shares

Total cumulative preferred stock dividend = Number of cumulative preferred stock * Par value * Dividend rate = 2,500 * $100 * 10% =  2,500 * $100 * 10% = $25,000

Outstanding cumulative preferred stock dividend in Year 1 = Total cumulative preferred stock dividend - Total cumulative preferred stock dividend paid in Year 1 = $25,000 - $10,000 = $15,000

Outstanding cumulative preferred stock dividend in Year 2 = Outstanding cumulative preferred stock dividend in Year 1 = $15,000

Total cumulative preferred stock dividend paid in Year 3 = Total cumulative preferred stock dividend + Outstanding cumulative preferred stock dividend in Year 2 = $25,000 + $15,000 = $40,000

Total common stock dividend paid in Year 3 = Dividend distributed in Year 3 - Total cumulative preferred stock dividend paid in Year 3 = $60,000 - $40,000 = $20,000

6 0
2 years ago
DirectProtect is an insurance provider that uses telemarketers rather than insurance agents to sell its insurance and to deal wi
katovenus [111]

Answer:

d. Constraint

Explanation:

The dependent variable variations are explained as an effect, due to variations in causal independent variables. The dependent variable might be in form of an objective function, as a function of independent variables, which needs to be maximised or minimised. Constraint is a limitation to the objective function maximisation / minimisation.

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2 years ago
Why do u make us pay have the help we need
dezoksy [38]

Answer:

yeah right

Explanation:

8 0
2 years ago
Willis Company had $200,000 in credit sales for 2016, and it estimated that 2% of the credit sales would not be collected. The b
HACTEHA [7]

Answer:

True

Explanation:

It's True because you have to deduct from the total Accounts Receivable the balance in the Cr Allowance for Uncollectible Accounts  estimated.

The company estimate that 2% of the total Credit Sales will be uncollectible, which is, $4,000, if we deduct this value of the balance of accounts receivable of $38,000, we have a Net Realizable Value of Accounts Receivable of $34,000

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Cr Allowance for Uncollectible Accounts $ 4,000

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Net Realizable Value of Accounts receivable $ 34,000

7 0
3 years ago
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