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grin007 [14]
3 years ago
11

The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.52 per share on its stock. The dividends are expected to grow at

a constant rate of 7 percent per year indefinitely.
Required:

a. If investors require a 11 percent return on The Jackson-Timberlake Wardrobe Co. stock, what is the current price?
b. What will the price be in 8 years?
Business
1 answer:
Stolb23 [73]3 years ago
6 0

Answer:

A. $40.66

B. $69.86

Explanation:

A. Calculation for what is the current price

Using this formula

Current price=Dividend per share(1+Expected constant rate)/ (Require return percentage-Expected constant rate)

Let plug in the formula

Current price=1.52(1+.07) / (.11-.07)

Current price=1.52(1.07) / (.11-.07)

Current price=1.6264/0.04

Current price=$40.66

Therefore the Current price will be $40.66

b. Calculation for What will the price be in 8 years

Using this formula

Price=Dividend per share(1+Expected constant rate)^Numbes of years/ (Require return percentage-Expected constant rate)

Price=1.52(1+.07)^9/ (.11-.07)

Price=1.52(1.07)^9/ (.11-.07)

Price=2.7945/0.04

Price=$69.86

Therefore What will the price be in 8 years is $69.86

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Answer:

c. feels the marginal benefit of an extra hour of studying exceeds the marginal cost of not playing basketball.

Explanation:

Russel made a choice to study for an hour instead of playing basketball. When making choices people weigh the benefits of an action against its opportunity cost.

Opportunity cost is the forgone alternative when we choose to do something.

In this instance Russell chose to study and the opportunity cost was to enjoy playing a basketball game.

For him to choose to study it means he saw the benefit of reading to be greater than the marginal cost of playing basketball. So he chose the most beneficial activity for him.

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3 years ago
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If the level of incomes rises for high-income workers but doesn't change for low-income workers, then poverty will not change an
Aloiza [94]

If the level of incomes rises for high-income workers but doesn't change for low-income workers, "then poverty will not change and inequality will rise."

<h3>What is poverty?</h3>

Lack of resources to meet necessities like food, clothing, and shelter constitutes poverty. But poverty goes far beyond simply not having enough money.

According to the World Bank, poverty is as follows:

  • Hunger is poverty.
  • Absence of shelter is poverty.
  • Being sick and unable to visit a doctor is poverty.
  • Being illiterate and lacking access to education are both aspects of poverty.
  • Living day by day and not having a job are all signs of poverty.

Some faces of poverty is also-

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Therefore, rarely is there a single source of poverty. Some people don't have enough money due to a number of circumstances, including growing living costs, low salary, unemployment, and insufficient social security benefits.

To know more about factors cause poverty in low-income nations, here

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7 0
2 years ago
As of the end of its accounting period, December 31, Year 1, Great Plains Company has assets of $940,000 and liabilities of $300
Anvisha [2.4K]

Answer:

Th answer is: net income for year 2 is $45,000

Explanation:

We must first determine the equity for both years (equity= assets - liabilities)

  • Equity year 1 = $940,000 - $300,000 = $640,000
  • Equity year 2 = $995,000 - $270,000 = $725,000

Then we calculate the change in equity:

  • change in equity = $725,000 - $640,000 = $85,000

Finally to determine the net income or year 2 we use the following formula:

Net income (Y2)= change in equity - additional investments + dividends paid

net income (Y2) = $85,000 -$73,000 + $33,000 = $45,000

4 0
3 years ago
If $ 10,000 is invested in a certain business at the start of the​ year, the investor will receive $ 3 comma 000 at the end of e
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Answer:

$889.70

Explanation:

The computation of the net present value is shown below:

= Present value of all yearly cash inflows after applying discount factor - initial investment  

where,  

The Initial investment is $10,000

All yearly cash flows would be

= Annual amount received × PVIFA for 4 years at 4%  

= $3,000 × 3.6299

= $10,889.70

Refer to the PVIFA table

So, the net present value is

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= $889.70

7 0
3 years ago
Suppose all individuals are​ identical, and their monthly demand for Internet access from a certain leading provider can be repr
topjm [15]

Answer: B) $16

Explanation:

First lets take down the data given to us;

access from a certain leading provider can be represented as p​ = 5 minusone half q i.e 5 - 0.5q

Using the concept of two-part terrific which is a monopolistic market system, it is type of price discrimination where the price of goods and services are of two section namely; a lump-sum fee (expensive) as well as a per-unit charge .

Entry fees are set to be equal to the consumer surplus in the competitive equilibrium.

So we calculate our price and quantity in the competitive equilibrium first,  marginal cost is equal to price

5 - 0.5q = 1

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Now the intercept of the demand curve at the vertical axis is 5,

so the consumer surplus in the competitive equilibrium is:

M = (5 - 1) * 8 / 2

M = 4 * 4

M = 16

the monthly access fee will be equal to $16.

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