Answer:
Ans. Current Share Price=$33.85
Explanation:
Hi, we first have to establish the dividend for the first 3 years and the dividend when the growth rate falls off to a constant rate of 8% with the formula to find the present value of a perpetuity with constant growth rate. From there, we need to bring all the above cash flows to present value and that is the price of the share. The formula is as follows.
![Price=\frac{D1}{(1+r)^{1}}+\frac{D2}{(1+r)^{2} } +\frac{D3}{(1+r)^{3} } +\frac{D3(1+g)}{(r-g)} \frac{1}{(1+r)^{3} }](https://tex.z-dn.net/?f=Price%3D%5Cfrac%7BD1%7D%7B%281%2Br%29%5E%7B1%7D%7D%2B%5Cfrac%7BD2%7D%7B%281%2Br%29%5E%7B2%7D%20%7D%20%2B%5Cfrac%7BD3%7D%7B%281%2Br%29%5E%7B3%7D%20%7D%20%2B%5Cfrac%7BD3%281%2Bg%29%7D%7B%28r-g%29%7D%20%5Cfrac%7B1%7D%7B%281%2Br%29%5E%7B3%7D%20%7D)
To find D1, D2,and D3, we have to do this.
D1=Do(1+0.19)
D2=D1(1+0.19)
D3=D2(1+0.19)
Since 0.19 is the growth rate for 3 years. Everything should look like this
![Price=\frac{4.04}{(1+0.12)^{1}}+\frac{4.29}{(1+0.12)^{2} } +\frac{25.52}{(1+0.12)^{3} } +\frac{25.52(1-0.08)}{(0.12+0.08)} \frac{1}{(1+0.12)^{3} } =33.85](https://tex.z-dn.net/?f=Price%3D%5Cfrac%7B4.04%7D%7B%281%2B0.12%29%5E%7B1%7D%7D%2B%5Cfrac%7B4.29%7D%7B%281%2B0.12%29%5E%7B2%7D%20%7D%20%2B%5Cfrac%7B25.52%7D%7B%281%2B0.12%29%5E%7B3%7D%20%7D%20%2B%5Cfrac%7B25.52%281-0.08%29%7D%7B%280.12%2B0.08%29%7D%20%5Cfrac%7B1%7D%7B%281%2B0.12%29%5E%7B3%7D%20%7D%20%3D33.85)
notice that the sign of the last part do not coincide with the formula, that is because the growth rate from the first 3 years is -8%.
Best of luck.
Answer:
B. The cost of utilities is deductible for AGI
Explanation:
The entire cost of the utilities would be for AGI deduction assuming no personal use of the condo. The employer portion of Marilyn's self-employment tax would be deductible as well.
Adjusted gross income (AGI) is a measure of income calculated from your gross income and used to determine how much of your income is taxable. It is the starting point for calculating a filer's tax bill in the United States and, among other things, is the basis for many deductions and credits. When filing your taxes online—as about 80% of filers do—the software you use will calculate your AGI for you.
Answer:
Employers treat the taxable fringe benefits the same as cash compensation.
Explanation:
Taxable fringe benefits "are included in gross income and subject to federal withholding, social security, and Medicare taxes".
Fringe benefits are "perks and additions to normal compensation that companies give their employees, such as life insurance, tuition assistance, or employee discounts".
* The cost of the taxable fringe benefit is deductible to the employer, not the value of the benefit to the employee.
FALSE, the taxable fringe benefit is not deductible from the employer.
* Employers treat the taxable fringe benefits the same as cash compensation.
TRUE, and as we can see on the definition above the taxable fringe benefits are treated as a compensation that comapnies giv their employees.
Answer:
(B) Advice the production and purchasing department to produce or order smaller quantities of products.
Explanation:
According to my research on basic economics and business owning I can say that the best thing for Georgia to do in this situation in order to help her company become more value driven is to Advice the production and purchasing department to produce or order smaller quantities of products. This is because since product is not selling fast enough they should sell what they already have before producing more, otherwise they will be wasting money on products which will eventually cause them to be overflowing stock. Thus losing money.
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