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Naddik [55]
2 years ago
5

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 7 years because the

firm needs to plow back its earnings to fuel growth. The company will pay a $9.57 per share dividend in 8 years and will increase the dividend by 0.06 per year thereafter. If the required return on this stock is 0.14, what is the current share price? Answer with 2 decimals (e.g. 45.45).
Business
1 answer:
grigory [225]2 years ago
8 0

Answer:

$47.81

Explanation:

Value after year 8 = (D8*Growth rate) / (Required return-Growth rate)

Value after year 8 = ($9.57*1.06) / (0.14-0.06)

Value after year 8 = $10.1442 / 0.08

Value after year 8 = $126.8025

Current share price = Future dividend and value*Present value of discounting factor(rate%,time period)

Current share price = $9.57/(1.14)^8 + $126.8025/(1.14)^8

Current share price = $3.35485015 + $44.4517646

Current share price= $47.81

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GalinKa [24]

Answer:

To verify the accuracy of his rental history

Explanation:

Based on the scenario in the question, it is it important for Christian to check the information recorded on his credit report so as to verify the accuracy of his rental history.

He has to verify his rental history so as to know if there's a mistake or if the details written are not correct. To apply for the mortgage, he needs to ensure that the details are correct.

Explanation:

4 0
3 years ago
Ashley has a large and growing collection of animated movies. She wants to replace her old television with a new LCD model, so s
Lelu [443]

Answer:

$3,402

Explanation:

We are to calculate the future value of the annuity

The formula for calculating future value = A x (B / r)

B = [(1 + r)^n] - 1

R = interest rate

N = number of years

(1.10)² - 1 = 0.21

$1,620 x( 0.21 / 0.1) = $3,402

4 0
2 years ago
To compute your tax liability, turn to the tax tables and look up the amount called
galben [10]
The answer is taxable income. It alludes to the base whereupon a pay assess framework forces an expense. By and large, it incorporates a few or all things of salary and is lessened by costs and different derivations. The sums included as wage, costs, and different conclusions fluctuate by nation or framework.
5 0
3 years ago
Amy's Drive-Thru, a fast food facility near a college campus, offers healthy, sustainably grown vegetarian and vegan fast-food a
Tems11 [23]

Answer: Focused differentiation strategy

Explanation: In focused differentiation strategy the focus of the entity providing the service is to make their product suitable and as per the expectations of the target market , which is very narrow in size and the requirements of the customers are very unique in such kind of target markets.

In the given case, as we know that vegetarian food is not very popular among the college students, since the preference towards health is usually seen in the age group of 25 to 35 working individuals.

Thus, the customer base of amy is very narrow.

Hence, we can conclude that Amy's is using focused differentiation strategy

7 0
3 years ago
A five-year project has a projected net cash flow of $15,000, $25,000, $30,000, $20,000, and $15,000 in the next five years. It
riadik2000 [5.3K]

The value of Net present value is $12,895.45.

Given that

initial investment = $50,000

1st-year cash flow = $15,000

2nd-year cash flow =$ 25,000

3rd-year cash flow =$ 30,000

4th-year cash flow = $20,000

5th-year cash flow = $15,000

rate = 20%

using formula

NPV = \frac{R}{({1+i})^t}

NPV = \frac{15000}{({1+0.20})^5}\\NPV = 12895.45

<h3>What is Net Present value?</h3>
  • The current value of a future stream of payments from a business, project, or investment is determined using net present value, or NPV.
  • You must predict the timing and size of future cash flows in order to determine NPV, and you must choose a discount rate that is equal to the least allowable rate of return.
  • Your cost of capital or the rewards offered by substitute investments with comparable risk may be reflected in the discount rate.
  • Positive NPV indicates that the rate of return on a project or investment will be higher than the discount rate.
  • to learn more about Net present value with the given link

brainly.com/question/14293955

#SPJ4

4 0
1 year ago
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