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Hoochie [10]
3 years ago
6

S&P Enterprises will pay an annual dividend of $2.08 a share on its common stock next year. The firm just paid a dividend of

$2.00 a share and adheres to a constant rate of growth dividend policy. What will one share of S&P common stock be worth ten years from now if the applicable discount rate is 8 percent?
Business
1 answer:
MrMuchimi3 years ago
3 0

Answer:

The price of the stock will be $76.97

Explanation:

We first need to determine the constant growth rate on dividends.

Growth rate (g) = (D1 - D0) / D0  

Growth rate (g) = (2.08 - 2.00) / 2   =  0.04 or 4%

To calculate the price of a stock today whose dividends are growing at a constant rate, we use the constant growth model of DDM. The price of the stock today under this model is,

P0 = D1 / ( r - g )

Where,

  • D1 is the dividend expected for the next year
  • r is the required rate of return
  • g is the growth rate

Thus, to calculate the price of the stock today at t=10, we will use the dividend expected in Year 11 or D11.

D11 = D0 * (1+g)^11

Where P10 is the price 10 years from today.

P10 = 2 * (1+0.04)^11 / (0.08 - 0.04)

P10 = $76.97

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Shaan and Anita currently insure their cars with separate companies, paying $790 and $645 a year. If they insure both cars with
iren2701 [21]

Answer:

The future value of annual savings is $1,370.30

Explanation:

The amount of annual savings =(Shaan's premium +Anita's premium)*10%

Shann's premium is $790

Anita's premium  is $645

Annual savings =($790+$645)*10%

                          =$143.5

The future value formula is given below:

=-fv(rate,nper,pmt,-pv)

rate is 5% annual interest rate

nper is the 8 years that is the duration of investment

pmt is the annual savings of $143.5

pv is the total amount invested now which is zero

=-fv(5%,8,143.5,0)

fv=$ 1,370.30

8 0
3 years ago
The two biggest drawbacks or disadvantages of unrelated diversification are:___________.
lapo4ka [179]

Answer:

c. demanding managerial requirements and limited competitive advantage potential that cross-business strategic fit provides.

Explanation:

An unrelated diversification can be defined as a situation in which an existing business or company enters or invest in an entirely new business or industry that do not have any similarity whatsoever with its original business or product line. For example, an automobile manufacturing company that decides to acquire or invest in a clothing or shoe business.

Hence, the two biggest drawbacks or disadvantages of unrelated diversification are demanding managerial requirements and limited competitive advantage potential that cross-business strategic fit provides.

Also, the difficulties in successfully managing a collection of unrelated different business and having minimal competitive advantage potential over its rivals in the industry that cross-business strategic fit provides is another disadvantage of unrelated diversification

3 0
3 years ago
abares Corporation had these transactions during 2020. Indicate whether each transaction is an operating activity, investing act
scZoUnD [109]

Answer:

(a) Issued $50,000 par value common stock for cash = Financing Activities

b) Purchased a machine for $30,000, giving a long-term note in exchange. Financing Activities = Non-cash Investing and Financing Activity

(c) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000 =  Non-cash Investing and Financing Activities

(d) Declared and paid a cash dividend of $18,000 = Financing Activities

(e) Sold a long-term investment with a cost of $15,000 for $15,000 cash = Investing Activities

(f) Collected $16,000 from sale of goods = Operating Activities

Explanation:

The Cash flows related to raising of capital is known as Cash flow from Financing Activities.

The Cash flows related to growing and selling of Assets of the business is known as Cash flow from Investing Activities.

The Cash flow related to trade in Ordinary course business of the Company is known as Cash flow from Operating Activities.

7 0
3 years ago
Calligraph Publishing Company has created a system for storing every piece of data about every one of its books, both those that
igomit [66]

Answer:

knowledge management                                

Explanation:

Knowledge management relates to the mechanism by which an organization's knowledge and information is developed, exchanged, used and controlled. This refers to a multidisciplinary approach by making the best use through knowledge to attain organisational goals.

Knowledge management activities usually focus on institutional priorities like better performance, competitive edge, creativity, experiences gained exchange, alignment and institutional quality improvement.

7 0
3 years ago
Matt and Claire go into an interview for the same position and they get asked very different questions depending on how the inte
Akimi4 [234]

Answer:

Unstructured interview

Explanation:

Unstructured interview is defined as one in which the questions asked are not prearranged. Rather they are spontaneous and questions to be asked are formulated during the course of the interview.

On the other structured interview is when questions are prearranged and candidates are asked the same questions.

So when Matt and Claire go into an interview for the same position and they get asked very different questions depending on how the interview is going, they are answering unstructured interview questions.

7 0
2 years ago
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