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oee [108]
3 years ago
5

Exercise Bicycle Company is expected to pay a dividend in year 1 of $1.20, a dividend in year 2 of $1.50, and a dividend in year

3 of $2.00. After year 3, dividends are expected to grow at the rate of 10% per year. An appropriate required return for the stock is 14%. The stock should be worth ________ today.
A) $33.00
B) $39.86
C) $55.00
D) $66.00
E) $40.68
Business
1 answer:
prisoha [69]3 years ago
3 0

Answer:

E.  $40.68

Explanation:

The computation of the stock worth today is shown below:

= (Dividend in year 1 ÷ 1 + required rate of return^number of years ) + (Dividend in year 2 ÷ 1 + required rate of return^number of years) + (Dividend in year 3 ÷ 1 + required rate of return^number of years)  + (Dividend in year 3 ÷ 1 + required rate of return^number of years) × (1 + growth rate) ÷ (required rate of return - growth rate)

= $1.2 ÷ 1.14 + $1.5 ÷ 1.14^2 + $2 ÷ 1.14^3 + $2 ÷ 1.14^3 × (1 + 10%) ÷ (14%-10%)

= $40.68

We simply applied the above formula

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Answer:

The maximum contribution is $3,850

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3 years ago
The petty cash fund has a current balance of​ $200. based on activity in the​ fund, it is determined that the balance needs to b
notka56 [123]

Cash account will change

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The motives of those involved in unethical behavior that caused the financial crisis in the real estate, banking, and mortgage industries included Option A greed and the wish to inflate their own earnings.

<h3>What is  unethical behavior?</h3>

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7 0
2 years ago
Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types o
san4es73 [151]

Answer:

Results are below.

Explanation:

<u>First, we need to calculate the plantwide predetermine manufacturing overhead rate:</u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

total estimated overhead costs for the period= (625,000 + 900,000 + 105,000 + 175,000 + 300,000 + 75,000)

total estimated overhead costs for the period= $2,180,000

Predetermined manufacturing overhead rate= 2,180,000 / 125,000

Predetermined manufacturing overhead rate= $17.44 per direct labor hour

<u>Now, we can allocate overhead to each product line:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

<u>Deluxe:</u>

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6 0
3 years ago
Suppose that the only café in town can sell five fish dinners per night at a price of $10 each. If this monopoly firm wants to s
UNO [17]

Answer:

a.$4

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initial price of fish dinner per piece was= $10

no. of fish dinner sold = 5

total initial revenue= 5*10= $50

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therefore the marginal revenue from the sixth dinner sold= 54-50= $4

hence option a is correct

4 0
3 years ago
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