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qwelly [4]
3 years ago
15

Synovec Corporation is expected to pay the following dividends over the next four years: $6.60, $17.60, $22.60, and $4.40. After

ward, the company pledges to maintain a constant 5.25 percent growth rate in dividends forever. If the required return on the stock is 7 percent, what is the current share price?
Business
1 answer:
Alexandra [31]3 years ago
3 0

Answer: $245

Explanation:

If the required return on the stock is 7 percent, the current share price would be calculated as:

= 6.60/1.07 + 17.60/1.07^2 + 22.60/1.07^3 + 4.40/1.07^4 + [(4.4 × 1.0525) / (7%-5.25%)] / 1.07^4

= $245.23

= $245 approximately

Therefore, the current share price will be $245

You might be interested in
Shore Company reports the following information regarding its production cost. Units produced 36,000 units Direct labor $ 31 per
Sedaia [141]

Answer:

$73.86 per unit

Explanation:

The computation of the cost per unit under the absorption costing is as follows

= Direct material per unit + Direct labor per unit + variable overhead per unit + fixed overhead per unit

where,

Variable overhead cost per unit

= $288,000 ÷ 36,000 units

= $8 per unit

And, the fixed overhead cost per unit is

= $102,920 ÷ 36,000 units

= $2.86 per unit

So the cost per unit is

= $32 + $31 + $8 + $2.86

= $73.86 per unit

3 0
3 years ago
ABC Corporation, after many profitable years, declares a one-time special cash dividend of $10.00 per share. After the announcem
Crank

Answer:

1 ABC Jan 100 Call

Explanation:

Although the OCC does not usually adjust the strike price of listed options for regular quarterly cash dividends. This is because they are known quantity that are segmented by the market into options premium.

For special cash dividends, they are not a frequent event hence market does not recognize them. This special cash dividend is $10 per share × 100 shares = $1,000 value per contract. It therefore means that the $1,000 value per contract will be adjusted.

The new strike price will be

= 110 - 10 cash dividend

= 100. It also means that the number of shares covered by the contract does not change.

4 0
3 years ago
Prepare the journal entries to record these transactions on blossom company's books using a periodic inventory system. (if no en
Mariana [72]

Since the company is following a periodic inventory system, it has to use temporary accounts to record sales and purchases.

Transaction A

Purchases – Dr 860500

Accounts payable 860500

Transaction B

Accounts payable - Dr $111,600

Purchase returns $111,600

Transaction C

Accounts payable - Dr 748900

Discount received 14,978

Cash 733,922

6 0
3 years ago
the accompanying diagram depict's alex's demand for shoes. a. if shoes cost $50 a pair, how many pairs of shoes will alex buy?
luda_lava [24]

If shoes cost $50 a pair, the number of shoes she would buy is 5.

<h3>How many shoes will she buy?</h3>

The image shown is a demand curve. A demand curve shows the relationship between price and quantity demanded. Price is on the y-axis and quantity demanded is on the x-axis.

In order to determine the quantity demanded, trace $50 to the curve and trace it down to the x axis.

Please find attached the diagram used in answering this question. To learn more about the demand curve, please check: brainly.com/question/25140811

#SPJ11

6 0
2 years ago
You've just opened up a new savings account at the local credit union. You deposited $500 into the account. If you leave your $5
scZoUnD [109]

Answer:

I believe the APY would be $520 for the rounded version and $520.20 for the not rounded

(not completely certain since i didnt fully understand)

Explanation:

using the formula for calculating compounding semi annualy

A = P(1 + r)t

A= 500(1+0.02)2 (i put 2 instead of one year because its semi annually so twice)

A= 500(1.02)2

A= 500x1.04=$520(rounded)

A=500x1.0404= $520.20(not rounded)

Please correct me if I understood your question wrong

5 0
2 years ago
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