What is a household inventory?

The stock of MTY Golf World currently sells for $90 per share. The firm has a constant dividend growth rate of 6% and just paid

Mazyrski [523]

Answer:

The correct option is c. $95.40.

Explanation:

To calculate, we have to first calculate the dividend payable 2 years from now as follows:

g = constant dividend growth rate = 6%, or 0.06

D0 = Dividend just paid = $5.09

D1 = Dividend payable 1 year from now = D0 * (1 + g) = $5.09 * (1 + 0.06) = $5.40

D2 = Dividend payable 2 years from now = D1 * (1 + g) = $5.40 * (1 + 0.06) = $5.724

The price at which the stock will sell one year from now can now be calculated as follows:

P = D2 / (r - g) ................... (1)

Where;

P = The price at which the stock will sell one year from now = ?

D2 = Dividend payable 2 years from now = $5.724

r = required rate of return = 12%

g = constant dividend growth rate = 6%

Substituting the values into equation (1), we have:

P = $5.724 / (12% - 6%)

P = $5.724 / 6%

P = $95.40

Therefore, the correct option is c. $95.40.

7 0

3 years ago

Carpenter Inc. had a balance of $80,000 in its warranty liability account as of December 2006, Carpenter's warranty expenditures

alukav5142 [94]

Answer: the answer is a because i just fell

Explanation:

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4 0

3 years ago

How free maket economy operates

Leokris [45]

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In a free market economy, the law of supply and demand, rather than a central government, regulates production and labor. Companies sell goods and services at the highest price consumers are willing to pay while workers earn the highest wages companies are willing to pay for their services.

6 0

4 years ago

What should be the basic goal of a firm when it sets a level of output

siniylev [52]

What should be the basic goal of a firm when it sets a level of output?

The firm should make sure that it maximizes its profits. Maximizing profits means they are making the most they possibly can with the items they are selling or services that are being offered. When they make their overall goals, they need to make sure they are going to be making as much as they possibly can to acheive their long-term goals.

8 0

4 years ago

Jole Co. lent $10,000 to a major supplier in exchange for a noninterest-bearing note due in three years and a contract to purcha

Lisa [10]

Answer:

Discount on note receivable and deferred charge.

Explanation:

The present value of the notes receivable has to be recorded by Jole Co. The reason this should be recorded as discount on note receivable is that the $10,000 will not be paid immediately but will be due for payment 3 years from the date the note was issued.

A deferred charge is an expense paid in advance and it is recorded and carried forward yearly in the balance sheet as an asset until when it is totally consumed or used. The 10% discount received by Jole Co. in the exchange agreement is a payment in advance and it will be recorded by Jole Co. as deferred charge. The reason is that it is a discount on the future purchase from the supplier over the next three years of a given amount of merchandise from the market price list.

I wish you the best.

6 0

3 years ago