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sergij07 [2.7K]
3 years ago
9

You are considering buying a share of stock in Company ABC. At the end of years 1, 2, and 3 the stock will pay you a dividend of

$10. In addition, at the end of the third year you expect to sell the share of stock for $200. If the interest rate is 5%, how much is the share of ABC stock worth to you today
Business
1 answer:
Dahasolnce [82]3 years ago
5 0

Answer:

$200

Explanation:

The computation of the share of the ABC stock worth to you today is shown below:

PV = Annual dividend (P/A, i, n) + Sale value (P/F, i, n)

i denotes the interest rate

n denotes the time period  

= $10 (P/A, 5%, 3) + $200 (P/F, 5%, 3)

= ($10 × 2.7232) + ($200 × 0.8683)

 = $27.23 + $172.76

 = $199.99

= $200

Basically we determine the present value

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<em>Answer:</em>

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3 0
3 years ago
Under variable costing, if a manager's bonus is tied to operating income, then increasing inventory levels compared to last year
inysia [295]

Answer: not affecting the manager's bonus

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The manager's bonus will therefore not change as a result of higher inventory levels. Were this absorption costing where fixed overhead was charged to inventory that was not sold, the manager's bonus would increase because the higher inventory level would absorb more of the cost.

7 0
3 years ago
Cameron has a small graphics design business that specializes in customizing social websites. The business is growing; however,
Veronika [31]

Answer: Introducing mass production methods into his business.

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4 0
3 years ago
Barney bought a small retail business a month ago. He plans to advertise it with the help of billboards and flyers to attract cu
disa [49]

Answer:

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6 0
3 years ago
Which demographic group has the lowest level of representation as a judge in the federal courts?
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5 0
3 years ago
Read 2 more answers
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