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vredina [299]
2 years ago
10

1) Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next three years, with the gro

wth rate falling off to a constant 4 percent thereafter. If the required return is 11 percent, and the company just paid a dividend of $2.15, what is the current share price
Business
1 answer:
tankabanditka [31]2 years ago
3 0

Answer:

P0 = $60.23475 rounded off to $60.23

Explanation:

To calculate the market price of the stock today, we will use the two stage growth model of DDM. The two stage growth model calculates the values of the stock today based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D0 * (1+g1) / (1+r)  +  D0 * (1+g1)^2 / (1+r)^2  +  ...  +  D0 * (1+g1)^n / (1+r)^n  +  [(D0 * (1+g1)^n * (1+g2))  /  (r - g2)] / (1+r)^n

Where,

  • D0 is the dividend today
  • g1 is the short term growth rate
  • g2 is the long term or constant growth
  • r is the required rate of return on the stock

P0 = 2.15 * (1+0.30) / (1+0.11)  +  2.15 * (1+0.30)^2 / (1+0.11)^2  +  

2.15 * (1+0.30)^3 / (1+0.11)^3  +  [(2.15 * (1+0.30)^3 * (1+0.04)) / (0.11 - 0.04)] / (1+0.11)^3

P0 = $60.23475 rounded off to $60.23

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harina [27]

Answer:

23.68%

Explanation:

The computation of the cost of not taking a cash discount is shown below:-

Cost of not taking a cash discount = [Discount percentage ÷ (100% - Disc.%)] × (360 ÷ (Final due date - Discount period))

= (2% ÷ 98%) × (360 ÷ (50 - 19))

= 2.04% × 11.61

= 23.68%

Therefore for computing the cost of not taking a cash discount we simply applied the above formula.

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Lady_Fox [76]

Answer:

B) people face trade offs

Explanation:

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In this case, Billie Jean only has $120 and she wants to buy both products, but she can only buy one. Whatever product she decides to buy will leave her with $0, so if she wants to purchase the other product she will need to find a job and earn some money, or if she already has a job, she will need to work more hours.

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Name four reasons for the success of the mongols as conquerors
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Here are some of the reasons why the Mongols were so successful as conquerors:
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2 they were numerous - there were over 10,000 people in the Mongolian army
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Answer:

$90

Explanation:

The formula and the computation of the contribution margin per unit are presented below:

Contribution margin per unit = Selling price per unit - variable cost per unit

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