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3 years ago

What is the value of a share of Henley Inc. to an investor who requires a 11 percent

Mathematics

1 answer:

Karolina [17]3 years ago

4 0

Answer:

Value of Henley Inc.'s share is $16.76

Step-by-step explanation:

The present value of the dividends over for the three years and the terminal value of the dividends would give us a fair share price that an investor would pay

Year 1 PV of dividends=$1.10/(1+11%)^1=$0.99

Year 2 PV of dividends=$1.10/(1+11%)^2=$0.89

Year 3 PV of dividends=$1.10/(1+11%)^3=$0.80

The terminal value formula=dividend*(1+g)/(r-g)

g is the dividend growth rate of 5%

r is the investor's required rate of return which is 11%

terminal value=$1.10*(1+5%)/(11%-5%)=$19.25

The terminal is discounted to present value using the discount factor of year 3

PV of terminal value =$19.25 /(1+11%)^3=$ 14.08

Total present values=$0.99+$0.89+$0.80+$14.08 =$16.76

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Given:

The figure of a right angle triangle.

$a=b$

Hypotenuse = $9\sqrt{2}$ in.

To find:

The missing lengths of the sides.

Solution:

In the given right angle triangle both legs a and b are equal, and hypotenuse is $9\sqrt{2}$ in.

Using Pythagoras theorem, we get

$Hyponteuse^2=Base^2+Perpendicular^2$

$(9\sqrt{2})^2=(a)^2+(b)^2$

$81(2)=(a)^2+(a)^2$ $[\because a=b]$

$81(2)=2(a)^2$

Divide both sides by 2.

$81=(a)^2$

Taking square root on both sides.

$\pm \sqrt{81}=a$

$\pm 9=a$

Side cannot be negative. So,

$9=a$

Thus, the missing side lengths are a=9 in and b=9 in.

Therefore, the correct option is C.

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