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mixas84 [53]
3 years ago
8

CDB stock is currently priced at $77. The company will pay a dividend of $5.37 next year and investors require a return of 11.8

percent on similar stocks. What is the dividend growth rate on this stock
Business
1 answer:
OLga [1]3 years ago
8 0

Answer:

4.82%

Explanation:

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid

r = cost of equity

g = growth rate

77 = 5.37 / (0.118 - g)

77(0.118 - g)  =5.37

(0.118 - g) = 5.37 / 77

(0.118 - g) = 0.069740

g = 0.118 - 0.069740

g = 0.04826

g = 4.82%

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Eastern electric currently pays a dividend of about $1.64 per share and sells for $27 a share.
EastWind [94]

Answer:

The investors should expect to 9.26% of Return.

Explanation:

The Dividend Discount Model for Constant Growth should be used here.

DDM = Current Price = Dividend of Year 1 / (Required Return - Growth Rate)

Dividend of Year 1 = 1.64 (1.03) = 1.6892.

Re-arrange the above model for Required Return and put values:

Required Return = (1.6892 / 27) + .03 = .0926 OR 9.26%.

Thanks!  

6 0
3 years ago
Read 2 more answers
4. List three reasons for dividing a grill into zones of varying heat intensity.
SCORPION-xisa [38]

In the United States broiling is a top-down heat whereas grilling is a bottom-up heat. Grilling is anything where heat is aimed at food, top, side, or down. Baking in the UK is the same as in the U.S. (convective or ambient temperature equivalent cooking.)

Hey only know #6 so i hope this helps

3 0
3 years ago
On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances:
ivolga24 [154]

Answer:

TNT Fireworks

1. Adjusting Entries on January 31:

Accounts                              Debit         Credit

a. Depreciation Expense     $375

Accumulated Depreciation                $375

b. Uncollectible Expense   $5,620

Allowance for Uncollectible Accounts $5,620

c. Accrued interest revenue $120

Interest Revenue                                 $120

d. Salaries Expense           $34,000

Salaries payable                                 $34,000

e. Income Tax Expense     $10,400

Income tax payable                            $10,400

2. Adjusted Trial Balance as of January 31, 2021:

Accounts                              Debit         Credit

Cash                                   $ 2,600

Accounts Receivable       238,400

Allowance for Uncollectible Accounts $9,220

Inventory                            12,600

Notes Receivable

(5%, due in 2 years)        28,800

Land                                169,000

Equipment                       20,900

Accumulated Depreciation                      375

Depreciation Expense         375

Salaries Expense           65,200

Utilities Expense             17,900

Income Tax Expense     10,400

Uncollectible Expense   5,620

Accounts Payable                             102,200

Salaries Payable                                34,000

Income Taxes Payable                      10,400

Common Stock                              234,000

Retained Earnings                           69,600

Sales Revenue                              234,000

Interest Revenue                                  120

Accrued Interest

Receivable                      120

Cost of Goods Sold 122,000

Total                      $693,925  $693,915

3. Multi-step Income Statement for the period ended January 31, 2021:

Sales Revenue                              234,000

Cost of goods sold                        122,000

Gross profit                                  $112,000

Interest Revenue                                 120

Total revenue                              $112,120

Depreciation Expense         375

Salaries Expense           65,200

Utilities Expense             17,900

Uncollectible Expense   5,620  $89,095

Income before tax                      $23,025

Income Tax Expense                    10,400

Net Income                                 $12,625

Retained Earnings, January 1     69,600

Retained Earnings, January 31 $82,225

4. Classified Balance Sheet as of January 31, 2021:

Assets:

Cash                                                   $ 2,600

Accounts Receivable       238,400

Uncollectible Accounts       9,220   229,180

Accrued Interest Receivable                   120

Inventory                                             12,600

Current assets                              $244,500

Notes Receivable

(5%, due in 2 years)         28,800

Land                                  169,000

Equipment            20,900

Accumulated Dep.     375 20,525  218,325

Total assets                                  $462,825

Liabilities:

Accounts Payable           102,200

Salaries Payable               34,000

Income Taxes Payable     10,400 $146,600

Equity:

Common Stock             234,000

Retained Earnings          82,225  $316,225

Total liabilities and Equity           $462,825

5. Closing Journal Entries:

Accounts                              Debit         Credit

Income Summary             $221,495

Depreciation Expense                                  375

Salaries Expense                                    65,200

Utilities Expense                                      17,900

Income Tax Expense                              10,400

Uncollectible Expense                             5,620

Cost of Goods Sold                             122,000

To close temporary accounts to the income summary.

Sales Revenue                 234,000

Interest Revenue                     120

Income Summary                              $234,120

To close temporary accounts to the income summary.

Cash                                   $ 2,600

Accounts Receivable       238,400

Inventory                             12,600

Notes Receivable

(5%, due in 2 years)         28,800

Accrued Interest

Receivable                             120

Land                                169,000

Equipment                       20,900

Allowance for Uncollectible Accounts $9,220

Accumulated Depreciation                        375

Accounts Payable                               102,200

Salaries Payable                                   34,000

Income Taxes Payable                         10,400

Common Stock                                 234,000

Retained Earnings                              82,225

To close permanent accounts to the balance sheet.

Explanation:

a) Data and Calculations:

Accounts                              Debit         Credit

Cash                                 $ 60,100

Accounts Receivable         27,800

Allowance for

 Uncollectible Accounts                       $ 3,600

Inventory                            37,700

Notes Receivable

 (5%, due in 2 years)        28,800

Land                                 169,000

Accounts Payable                                  16,200

Common Stock                                   234,000

Retained Earnings                                69,600

Totals                          $ 323,400   $ 323,400

See workings attached.

Download docx
8 0
3 years ago
Marko, Inc., is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $5,700, $10,700, and
vovikov84 [41]

Answer:

Total PV= $26,176.63

Explanation:

Giving the following information:

Cash flow:

Cf1= $5,700

Cf2= $10,700

Cf3= $16,900

<u>To calculate the price of the investment now, we need to use the following formula on each cash flow:</u>

PV= Cf / (1+i)^n

PV1= 5,700/1.11= 5,135.14

PV2= 10,700/1.11^2= 8,684.36

PV3= 16,900/1.11^3= 12,357.13

Total PV= $26,176.63

7 0
2 years ago
An advantage of the _____ costing method is that the cost of goods sold approximates its current cost.
Komok [63]

Answer:

weighted average

Explanation:

An advantage of the weighted average costing method is that the cost of goods sold approximates its current cost. This is mainly due to the fact that the cost of each unit is made equal to the same cost of all units that are currently available for sale during that extended period of business. Therefore approximating its total current cost.

8 0
3 years ago
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