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xenn [34]
3 years ago
12

Toy Mart recently announced that it will pay annual dividends at the end of the next two years of $1.60 and $1.10 per share, res

pectively. Then, in Year 5 it plans to pay a final dividend of $13.50 a share before closing its doors permanently. At a required return of 13.5 percent, what should this stock sell for today
Business
1 answer:
Delicious77 [7]3 years ago
6 0

Answer:

$9.43

Explanation:

Calculation for what should this stock sell for today

Stock today = $1.60/1.135 + $1.10/1.135^2 + $13.50/1.135^5

Stock today = $9.43

Therefore what should this stock sell for today is $9.43

You might be interested in
In an imaginary economy, consumers buy only sandwiches and magazines. The fixed basket consists of 20 sandwiches and 30 magazine
rodikova [14]

Answer:

$2.5

Explanation:

Given:

Number of sandwiches in basket = 20

Number of magazines in basket = 30

cost of sandwiches in 2006 = $4

Cost of magazines in 2006 = $2

cost of sandwiches in 2007 = $5

Consumer price index in 2007 = 125

Now,

Consumer price index = \frac{\sum(p_1q0)}{\sum(p_0q0)}\times100

or

125 = \frac{20\times\$5+30\times X}{20\times\$4+30\times\$2}\times100

here,

X is the price of magazines in 2007

thus,

125 = \frac{\$100+30\times X}{$80+$60}\times100

or

1.25 × ($80 + $60 ) = $100 + 30X

or

30X = $175 - $100

or

X = $2.5

Hence,

The price of magazines in 2007 was $2.5

4 0
4 years ago
According to the aggregate demand curve, when the aggregate price level _____, the quantity of aggregate output _____. rises; de
iren2701 [21]

Answer:

rises; demanded falls

Explanation:

The aggregate demand curve exhibits a negative relationship between aggregate price levels and aggregate output demanded. If aggregate price levels falls, aggregate output demanded rises and if aggregate price levels rises, aggregate output demanded falls.

The aggregate demand curve is negatively sloped.

Please check the attached image for a graph of the aggregate demand curve.

I hope my answer helps you

3 0
3 years ago
2. A couple would like to take a cruise to Alaska, 15 months from now. They have $1500 in a savings account. The savings account
ivann1987 [24]

Answer:

a.- $ 3,529.82  

b.-  $ 3,512.11

c.-  $   132,77

Explanation:

In each case, we must calculate the value of their current savings and the additional investment.

The saving are the same for each scenario so let's calculate that first:

Principal \: (1+ r)^{time} = Amount

Principal 1,500.00

time 15 years

rate 0.01000

1500 \: (1+ 0.01)^{15} = Amount

Amount 1,741.45

Then we add the funds generated from the investment:

a.- 110 annuity due for 15 month:

C \times \frac{(1+r)^{-time} -1}{rate}(1+r) = FV\\

C  $ 110

time 15 months

rate 0.01

110 \times \frac{(1+0.01)^{15} -1 }{0.01} = FV\\

FV $1,788.3651

We add the savings and get a total of:  $ 3,529.82  

b.- 110 ordinary annuity

C \times \frac{(1+r)^{time} -1}{rate} = FV\\

C  $ 110

time 15 months

rate 0.01

110 \times \frac{(1+0.01)^{15} -1}{0.01} = FV\\

FV $1,770.6585

Plus, original savings of 1,741.45 =  3,512.11  

c.-

If they need 3,900 then the fund must cover the difference between these and the savings future value:

3,900 - 1,741.45 = 2,158.55

Now we calculate the PMT, considering the payment are at the beginning:

FV \div \frac{(1+r)^{time} -1 }{rate}(1+r) = C\\

FV  $ 2,158.55

time  15

rate           0.01

2158.55 \div \frac{(1+0.01)^{15} -1}{0.01} (1+0.01) = C\\

C  $ 132.770

3 0
4 years ago
Tina specializes in newspaper print layout. Unfortunately, her newspaper transformed into a digital-copy only and she was laid o
mr_godi [17]

Answer:

Structural

Explanation:

It is correct to say that Tina's scenario is an example of structural unemployment, that there are structural economic changes, which can have several different reasons, in the case of the above question, the structural change was caused by a technological change that made the newspaper where Tina worked if she scanned, and Tina's skills were not sufficient to keep up with such changes, which resulted in her resignation.

This is a type of long-term unemployment, which can negatively impact a society, with a large number of people unemployed and disqualified for current job openings, to reduce this problem, it is necessary that companies invest in training programs and effective qualifications so that its employees can follow the structural changes that occurred in their jobs.

6 0
3 years ago
Suppose a bank does NOT hold any excess reserves (it loans all available reserves) and the reserve ratio is 20%. If Melanie depo
s2008m [1.1K]

Answer:

$200

Explanation:

Reserve ratio is the percentage of a deposit that a bank is supposed to withhold as reserves forming part of deposit that banks make into federal reserve.

It plays a major role in deciding the amount of money available to be lent and supply of money.

<u>Workings</u>

Reserve ratio - 20%

On a deposit of $1000, The reserve is 20% * 1000 =$200

Assuming no excess reserve , the limit on the deposit is $800

The reserve = $200

Therefore , if $600 is lent , the bank can further lend  ($800-$600)

$200

8 0
4 years ago
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