Answer:
The maximum that should be paid for the stock today is $45 per share.
Explanation:
To calculate the current share price or the maximum that should be paid for the stock today, we will use the dividend discount model approach.
The dividend discount model (DDM) estimates the value of a share/stock based on the present value of the expected future dividends from the stock. We will use the two stage growth model of DDM here as the growth in dividends of the stock is divided into two stages.
The formula for current price under two stage growth model is,
P0 = D0 * (1+g1) / (1+r) + D0 * (1+g1)^2 / (1+r)^2 + ... + D0 * (1+g1)^n / (1+r)^n +
[( D0 * (1+g1)^n * (1+g2)) / (r - g2)] / (1+r)^n
Where,
g1 is initial growth rate
g2 is the constant growth rate
r is the required rate of return
So, the price of the stock today will be,
P0 = 2 * (1+0.20) / (1+0.12) + 2 * (1+0.20)^2 / (1+0.12)^2 +
[( 2 * (1+0.20)^2 * (1+0.06)) / (0.12 - 0.06)] / (1+0.12)^2
P0 = $45
Answer:D. Does not constitute an acceptance of the offer.
Explanation:A Contract is a binding agreement between two persons with sound mind, contract agreements are contestable in the Courts,but for it to be acceptable as an evidence in the court of law certain prescribed conditions must be met.
Their was no agreement between Katrina and the company candy company, because her consent was not sort by the Company,the company should have sort her consent and if possible get her to sign certain agreement that will prevent Indiscriminate violation of the terms of agreement.
Answer: True
Explanation:
Variable selling and administrative expenses increase with the number of sales so in order to get them, one needs to multiply the number of sales by the variable and administrative expenses.
This also goes for the budgeted variable selling expenses. To find out these costs, multiply the expected variable and admin expenses by the budgeted number of sales. The amount you get will show the amount of variable expenses to budget based on the sales you budgeted.
Answer:
There is no change in investment for Apletra.
Explanation:
Because GDP, consumption, and government spending remains the same there would also be no chane in investment for Alpletra.
Answer:
$8,767.50
Explanation:
Calculation for what Legion should report as bond interest expense for the six months ended
Using this formula
Bond interest expense= Carrying Value of Bond x Effective interest rate
Let plug in the formula
Bond interest expense=$146,125 x 12% yield interest x 6 months/12 months
Bond interest expense=$8,767.50
Therefore what Legion should report as bond interest expense for the six months ended is $8,767.50
