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FromTheMoon [43]
3 years ago
7

What is the value of a stock which has a current dividend (D0) of $1.50, and is growing at the rate of 7%

Business
1 answer:
Fofino [41]3 years ago
4 0

Answer: $32.10

Explanation:

Here is the complete question:

What is the value of a stock which has a current dividend (D0) of $1.50, and is growing at the rate of 7%? The investor's required rate of return is 12%. a. $26.75

b. $30.00

c. $32.10

d. $21.42

e. $13.38

Current dividend =D0 = $1.50

Growth rate = g= 7% = 0.07

D1 = D0 × (1+g)

D1 = $1.50 × (1 + 0.07)

= $1.50 × 1.07

= $1.605

The value of the stock will then be:

P0 = D1 / (r - g)

P0= $1.605/(0.12 - 0.07)

P0 = $1.605 / 0.05

P0 = $32.10

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Answer:

It is more profitable to continue processing.

Explanation:

Giving the following information:

A company has inventory that cost $50,000. Its scrap value is $65,000. The inventory could be sold for $150,000 if manufactured further at an additional cost of $80,000.

Sell for scrap= 65,000 - 50,000= 15,000

Continue processing= 150,000 - 80,000 - 50,000= 20,000

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3 years ago
Major tire inc.'s manufacturing plant in charleston, south carolina was destroyed when hurricane hazel hit the coast. the compan
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Wilson Dover Inc. The total value (debt plus equity) of Wilson Dover Inc. is $500 million and the face value of its 1-year coupo
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Answer:

7.42%

Explanation:

Value = 500 million

Amount of debt = 200 million

Time = year

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Risk free rate = 0.05

Nd1 = 0.9720

Nd2 = 0.9050

We have to calculate the value =

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6 0
3 years ago
John is an older, retired Japanese American. He has a strong identification with his Japanese culture, still speaks primarily Ja
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Answer:

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Explanation:

Traditionalist -

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Traditionalist are the person who believe in writing letters rather than sending emails .

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Similarly from the data of the question , the correct answer is (A) Traditionalist .

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If a taxpayer sells property for cash, the amount realized consists of the net proceeds from the sale. For each of the following
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a. Is answered

b. The amount realized increases.

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c. The amount realized decreases.

As the mortgage is assumed by the seller, they will have to pay off the mortgage from the cash received therefore their realized value decreases.

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As the buyer is gets the property subject to the mortgage, they will be the ones making the mortgage payments instead of the seller so the seller's realized value will increase.

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