1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Novay_Z [31]
4 years ago
5

Ackert Company's last dividend was $4.00. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which d

ividends are expected to grow at a rate of 8.0% forever. The firm's required return (rs) is 12.0%. What is the best estimate of the current stock price?a. $87.00b. $89.87c. $80.31d. $104.21e. $95.61
Business
1 answer:
Elza [17]4 years ago
5 0

Answer:

First we need to use the ddm model when the growth rate is constant and find the price then,because the ddm model cannot be used when the growth rate  is not constant and then discount it back to present value at 12% which is the required return.

Last dividend = $4

Dividend one year from now = 4*1.015=4.06

Dividend 2 years from now = 4.06*1.015=4.12

Growth rate 2 years from now = 8%

R= 12%

Price = D*(1+G)/(R-G)

=4.12*(1+1.08)/(0.12-0.08)=4.45/0.04= 111.26

Price of stock 2 years from now $111.26, now we need to discount it to the present value. 111.26/1.12^2=88.69

Best estimate = b. $89.87

Explanation:

You might be interested in
A political leader suggesting that an economic downturn will be cushioned by nondiscretionary fiscal policy is referring to:____
pishuonlain [190]

Answer:

Option A is the correct approach.

Explanation:

  • This is indeed a connection to compulsory tax and government expense stabilizers which weren't at the discretion including its government. Throughout the event of a recession, expenses are cut, rising discretionary income to something like the extent that the economic depression is pacified.
  • Unemployment insurance, as well as other social programs, are consequently expanded without the clear intervention of the government

The other options offered are also not relevant to the scenario presented. So, the solution above is the right one.

5 0
3 years ago
Provincial Inc. reported the following before-tax income statement items: Operating income $ 520,000 Loss on discontinued operat
geniusboy [140]

Answer:

$176,800

Explanation:

Operating income ×income tax rate

$520,000 × 34% = $176,800

Therefore Provincial would report $176,800 of income tax expense as a separately stated line item in the income statement because $520,000 is the operating income tax before-tax income statement items and 34% is the actual income rate.

4 0
3 years ago
Read 2 more answers
Help!!!!!
uysha [10]
1. revenue 2. income 3. graph 4. equity 5. balance sheet 6. income taxes
5 0
3 years ago
When you do a job that needs to be done without being told, you demonstrate _____.
yKpoI14uk [10]
THE ANSWER IS .....
      B.INITIATIVE
5 0
4 years ago
terin, the chief human resources officer for a major financial services company, has met with each of her employees to set their
MArishka [77]

Given that Terin's employees have set their objectives in the company, the next thing that Terin expects from these employees would be to develop action plans.

Option D is the correct answer to this question. The action plans are sets of strategies that the employees have laid out that would help them to achieve their goals and objectives.

In order to do this, they have to make up lists of the things that they want to achieve in the firm and also list the strategies that they would employee to achieve them.

Read more on brainly.com/question/8374175?referrer=searchResults

3 0
3 years ago
Other questions:
  • How does the Open Market Trading Desk conduct its​ operations? A. by sending its buy and sell orders to the U.S. Treasury for ex
    13·1 answer
  • Local Co. has sales of $ 10.8 million and cost of sales of $ 5.7 million. Its​ selling, general and administrative expenses are
    12·1 answer
  • In terms of the global value system, when Kodak shifted manufacturing to China, what position did China then take in the system,
    8·1 answer
  • When are monopolies good?
    14·2 answers
  • Chelsie Enterprises declared a dividend to shareholders of record on Monday, February 8, that is payable on Friday, February 26.
    6·2 answers
  • Children with visual impairments tend to be more______ in social environments
    12·1 answer
  • he direct write-off method of accounting for uncollectible accounts a. emphasizes the matching of expenses with revenues. b. emp
    6·1 answer
  • What do right-to-work laws do?
    6·1 answer
  • Determine the net present value for a project that costs $84,500 and would yield after-tax cash flows of $13,000 the first year,
    15·1 answer
  • You are in the middle of an interview, and you feel like things are going horribly. The interviewer is asking questions that you
    8·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!