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Sergeeva-Olga [200]
3 years ago
11

Nuclear Inc. just paid a $2.75 dividend. Dividends are expected to grow by 30% in year 1, by 25% in year 2, and by 25% in year 3

. After this, dividends are expected to grow at constant rate of 5% per year. If the required return for this stock is 9%, how much should the stock sell for today
Business
1 answer:
Andrei [34K]3 years ago
7 0

Answer:

$124.58  

Explanation:

Year 1 dividend=$2.75*(1+30%)=3.575

Year 2 dividend =3.575 *(1+25%)=4.46875

Year 3 dividend=4.46875 *(1+25%)=5.5859375

Termina value=Year 3 dividend*(1+constant growth rate)/(required return-constant growth rate)

Termina value=5.5859375 *(1+5%)/(9%-5%)=146.6308594

stock price=3.575 /(1+9%)^1+4.46875 /(1+9%)^2+5.5859375 /(1+9%)^3+146.6308594 /(1+9%)^3

stock price=$124.58  

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Answer:

The responses can be defined as follows:

Explanation:

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3 0
3 years ago
Brief exercise 1-9 at the beginning of the year, morales company had total assets of $816,000 and total liabilities of $526,000.
kramer

<u>Calculation of amount of stockholders' equity at the end of the year:</u>


At the beginning of the year, Morales Company had total assets of $816,000 and total assets increased $178,000 during the year, hence Total Assets at the end of the year shall be 816000+178000 = $994,000


At the beginning of the year, Morales Company had total liabilities of $526,000 and total liabilities decreased $82,000 during the year. Hence Total Liabilities at the end of the year shall be 526000-82000 = $444,000


Now we can calculate amount of stockholders' equity at the end of the year as follows:

Equity = Assets – Liabilities

= 994,000-444,000

= $550,000


Hence, the amount of stockholders' equity at the end of the year shall be <u>$550,000</u>


6 0
3 years ago
In january 2010 a gallup poll asked a random sample of adults, "in general, are you satisfied or dissatisfied with the way thing
daser333 [38]
<span>This poll talks about the economic progress of the United States where during those times in year 2010 Barack Obama is the president of the country. The poll have given a big difference towards the evaluation on how the economy have a lot of negative effects to citizen of the country that it was before. First is the issue about unemployment many Americans have no jobs, remember that this issue really gives a fall towards economic progress development for it can help generate more potential opportunities specially when it comes to factors that are all in the benefit of people getting employed where the business can gain more with the workforce, second is the health care issues are also one of the factors considered why they are unsatisfied with the economy, the platform and campaigns relating to health issues were not that fully effective, lastly the federal budget deficit in which really imparts a major negative effect on the economy for this is used for many developmental projects for the government's economic stability.</span>
4 0
3 years ago
ABC Manufacturing has total fixed costs of $460,000. A unit of product sells for $20 and variable costs per unit are $11. Prepar
labwork [276]

Answer:

Net Income (Loss) = $440,000

Explanation:

Total Fixed Cost = $460000

Total Variable Cost =  $11 * 100,000 unit =  $1100000

Total Revenue = $20 * 100,ooo unit = $2000000

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Net Income = Contribution margin - Total Fixed cost

Net Income (Loss) = $900,000 - $460,000

= $440,000

3 0
4 years ago
The following information relating to a company's overhead costs is available. Actual total variable overhead $ 75,000 Actual to
NARA [144]

Answer:

$5,000 favorable

Explanation:

The computation of the total variable overhead variance is given below:

= Budgeted machine hours allowed for actual output × Budgeted variable overhead rate per machine hour - Actual total variable overhead

= 32,000 hours × $2.50 - $75,000

= $80,000 - $75,000

= $5,000 favorable

Since the favorable is more than the actual so it should be favorable

6 0
3 years ago
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