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Brilliant_brown [7]
3 years ago
8

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 26 percent for the next three years, with the growth

rate falling off to a constant 6 percent thereafter. If the required return is 12 percent, and the company just paid a dividend of $1.90, what is the current share price?
Business
1 answer:
Airida [17]3 years ago
4 0

Answer:

$ 55.04  

Explanation:

Year 1 dividend=$1.90*(1+26%)=$2.394

Year 2 dividend=$2.394 *(1+26%)=$3.01644

Year 3 dividend=$3.01644 *(1+26%)=$3.8007144

Terminal value of dividend=Year 3 dividend*(1+terminal growth rate)/(required return-terminal growth rate)

Terminal value of dividend=$3.8007144 *(1+6%)/(12%-6%)=$67.1459544

The current share price is the present value of expected dividends and terminal value as below:

share price=$2.394 /(1+12%)^1+$3.01644 /(1+12%)^2+$3.8007144 /(1+12%)^3+$67.1459544/(1+12%)^3

share price=$55.04  

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The goal is to do your best in the job you have, so before making that important choice, it’s good to think about maybe your talents or hobbies that you have.
You could ask yourself questions such as:

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5 0
4 years ago
Information regarding Maxwell’s direct labor cost for the month of January follows: Direct labor hourly rate paid $ 29.20 Total
Umnica [9.8K]

Answer:

  1. <u>std rate  $30.64</u>
  2. <u>efficiency variance  $6,128.00</u>

Explanation:

We will work the rate variance to obtain the standard rate:

(standard\:rate-actual\:rate) \times actual \: hours DL \: rate \: variance

actual rate  $29.20

actual hours 11,700

difference  $1.44

rate variance  $16,800.00

(standard\:rate-29.2) \times 11,700 = 16,700

(standard\:rate= 16,700 \div 11,700 +29.2

<u>std rate  $30.64</u>

<u></u>

<u>Now we can solve for the labor efficiency variance:</u>

(standard\:hours-actual\:hours) \times standard \: rate = DL \: efficiency \: variance

std  hours 11700

actual hours 11500

std rate  $30.64

difference 200

<u>efficiency variance  $6,128.00</u>

The diference is positive, sothe variance is favorable.

4 0
3 years ago
The etruscans developed a special sophistication in casting and engraving on
Archy [21]
The Etruscans developed a special sophistication in casting and engraving on <u>bronze.
</u>The Etruscans were an ancient culture that was located in central and northern Italy. They were very famous for their art, especially for bronze casts and engravings that are an important archaeological relic even today. They weren't the first nation to do this type of art, however, they were the best.<u>
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4 0
4 years ago
On January 1, Year 1, Stratton Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note requir
lisov135 [29]

Answer:

1. Debit Interest Expense $7,000; debit Notes Payable $7,238; credit Cash $14,238.

Explanation:

The journal entry is shown below:

Note payable A/c Dr $7,238

Interest expense A/c Dr $7,000

  To Cash A/c $14,238

(Being the first payment on the note is recorded)

The computation of the interest expense is shown below:

= Borrowed amount × rate of interest

= $100,000 × 7%

= $7,000

And, the remaining balance left is reported in the note payable account

3 0
3 years ago
Morales Company sells $320,000 of its receivables to Instant Factors, Inc. Instant Factors assesses a finance charge of 3% of th
bazaltina [42]

Answer:

Dr Cash $310,400

Dr Factoring expense$9,600

Cr Account receivable $320,000

Explanation:

Preparation of the journal entry to record the sale of the receivables on Morales Company's books.

Dr Cash $310,400

($320,000-$9,600)

Dr Factoring expense$9,600

($320,000*3%)

Cr Account receivable $320,000

(Being to record the sale of the receivables on Morales Company's books

7 0
3 years ago
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