1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Readme [11.4K]
3 years ago
12

Brushy Mountain Mining Company's ore reserves are being depleted, so its sales are falling. Also, its pit is getting deeper each

year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 6% per year. What is the value of Brushy Mountain's stock (in dollars) if the company is expected to pay $4.40/share in dividend at t
Business
1 answer:
hammer [34]3 years ago
6 0

The question is incomplete. The complete Question is,

Brushy Mountain Mining Company's coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 4% per year. If D0 = $2 and rs = 17%, what is the estimated value of Brushy Mountain's stock?

Answer:

P0 = $9.1428 rounded off to 9.14

This answer is for the question above. Change the values and use the same formula if the values differ

Explanation:

The constant growth model of dividend discount model (DDM) can be used to calculate the price of the stock today. DDM calculates the price of a stock based on the present value of the expected future dividends from the stock. The formula for price today under constant growth DDM is,

P0 = D0 * (1+g) / (r - g)

Where,

D0 * (1+g) is the dividend expected in Year 1 or next year

g is the constant growth rate in dividends

r is the discount rate or required rate of return

P0 = 2 * (1-0.04)  /  (0.17 + 0.04)

P0 = $9.1428 rounded off to 9.14

You might be interested in
DS Unlimited has the following transactions during August.
stealth61 [152]

Solution:

Inventory                  21,320 debit

        A/P                                            21,320 credit

--to record purchase from Game Girl --

Inventory                   360 debit

       Cash                                           360 credit

--to record the freight-in--

A/P                            1,560 debit

    Inventory                                     1,560 credit

--to record returned goods to GameGirl--

A/P                          19,760 debit

      Inventory                                       395 credit

      Cash                                           19,365 credit

--to record payment to GameGirl--

accounts receivables       17,360 debit

             sales revenues                         17,360 credit

COGS                               8,406 debit

                                                              8,406 credit

--to record sale and subsequent cost of the sale--

total amount of the purchase in dollars:

82 game devices x 260 dollars each = 21,320

six returned devices:

6 x 260 = 1,560

invoice balance: 21,320 - 1,560 = 19,760

discount because payment within the first ten days:

19,760 x 2% = 395

final value: 19,760 - 395 = 19,365

sale of 62 devices at 280 = 17,360

4 0
3 years ago
If the elderly consume the same market basket as other people, then Social Security would have an uncertain impact on their stan
laiz [17]
Answer: b false

Explanation:
5 0
3 years ago
GE employs different sales forces within different product and service divisions of its major businesses. For example, within GE
jeka94

Answer:

Product sales force structure

Explanation:

Product sales force structure: This is a process by which an organization producing different product have sales forces for every products produced such that each salesperson specializes in the selling of a particular product.

GE adopted product sales force structure. They have salespersons for the different products produced in the company such as aviation, energy, transportation, water processing product and technologies.

Product sales force structure promotes specialization of skills in an organization. The salesperson in charge of selling a particular product will have to familiarize with the details of the product so as to give appropriate and accurate information to the consumers regarding the product. The continuity of the act leads to specialization in the sales of that product.

Product sales force structure tend to increase the profits of an organization because salespersons are now professionals in marketing the products.

7 0
3 years ago
In 2019, Paul, a single taxpayer, has taxable income of $30,000 exclusive of capital gains and losses. Paul incurred a $1,000 sh
sdas [7]

Answer:

the amount of his long-term capital loss carryover to 2019 is $2,000

Explanation:

(1000+4000-3000)

The Basics  

Capital losses are, of course, the opposite of capital gains. When a security or investment is sold for less than its original purchase price, then the dollar amount of difference is considered a capital loss. For tax purposes, capital losses are only reported on items that are intended to increase in value. They do not apply to items used for personal use such as automobiles (although the sale of a car at a profit is still considered taxable income).

Tax Rules  

Capital losses are reportable as deductions on the investor’s tax return, just as capital gains must be reported as income. Unlike capital gains, capital losses can be divided into three categories. Realized losses occur on the actual sale of the asset or investment, whereas unrealized losses are not reportable.

For example, an investor buys a stock at $50 a share in May. By August, the share price has dropped to $30. The investor has an unrealized loss of $20 per share. He holds on to the stock until the following year, and the price climbs to $45 per share. He sells the stock at that point and realizes a loss of $5 per share. He can only report that loss in the year of sale; he cannot report the unrealized loss from the previous year.

5 0
3 years ago
Is Nelson Mandela a born leader? Or a made leader? Why
ycow [4]
Made leader , only people who are born leaders are dictatorship countries like north korea
5 0
3 years ago
Other questions:
  • Megan is 5 years older than Sandy. If four years ago Megan was three years less than three times Sandys age, how old is Sandy no
    12·2 answers
  • Movie production and marketing techniques began to shift in the 1970s, with studios investing more money in fewer films in the h
    6·1 answer
  • Here's the revenue and expenses for the month. Calculate whether Mia had a profit or loss.
    9·1 answer
  • A company found that an experienced surveyor can survey a roadbed in 33 hours. an apprentice surveyor needs 88 hours to survey t
    13·1 answer
  • In​ 2019, Chen Corporation purchased treasury stock with a cost of $ 54 comma 000. During the​ year, the company declared and pa
    10·1 answer
  • At the end of a full year mary garber had $6248.95 in her saving account. If the rate of interest was 12.253%, how much money di
    7·1 answer
  • Eliminating the Drafty product line would eliminate $45,000 of direct fixed costs. The $78,000 of common fixed costs would be re
    10·1 answer
  • Swifty Corporation issued 3,100 5%, 5-year, $1,000 bonds dated January 1, 2017, at face value. Interest is paid each January 1.
    11·1 answer
  • What do you know, or have heard, about the U.S. Economy currently?
    13·2 answers
  • ¿Que es una fuente luminosa?
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!