Answer:
$81.52
Explanation:
The current share price is the present value of future dividends as well as the present value of the terminal value of dividends beyond year 6 as shown thus:
Current dividend=$3.95
Year 1 dividend=$3.95*(1+5%)=$4.15
Year 2 dividend=$4.15*(1+5%)=$4.36
Year 3 dividend=$4.36*(1+5%)=$4.58
The required rate of return(discount rate) for the dividends in the FIRST 3 years above is 14%
Year 4 dividend=$4.58*(1+5%)=$4.81
Year 5 dividend=$4.81*(1+5%)=$5.05
Year 6 dividend=$5.05*(1+5%)=$5.30
The required rate of return(discount rate) for the dividends in the NEXT 3 years above is 12%
Terminal value of dividend=Year 6 dividend*(1+growth rate)/(rate of return-growth rate)
growth rate=5%
rate of return=10%(rate of return thereafter)
terminal value=$5.30*(1+5%)/(10%-5%)
terminal value=$111.30
current share price=$4.15/(1+14%)+$4.36/(1+14%)^2+$4.58/(1+14%)^3+$4.81/(1+12%)^4+$5.05/(1+12%)^5+$5.30/(1+12%)^6+$111.30/(1+10%)^6
current share price=$81.52
Ndjdjdj djdhsjs hsjdhdhshcvdjsjvdjsbdbxbjdjjj]gshdhsjshdhxhsowhbs sjsbjsjd Ghana f d g. So. S. X. S. F. F. G d c f f d de d d d. F. coc c. Coc. Coc. Coc. C coc. Coc c c f. C c c c c c c. C c c. C c. C. C c c c c. Chutiya hai tu
The major factor that contributes to the decline of occupations in industries such as textile and clothing is due to the change of technology. Through the technological advancement, innovators are able to machines that work twice as fast as human beings.
In the long run, if inputs are increased by 10 percent and output increases by 20 percent, then diseconomies of scale are said to exist. It is because diseconomies of scale is likely to happen in the long run for a business with increasing inputs without decreasing the cost of production. It can happen when the increase in production is dependent on one part that needs to be completed but there is a delay on producing the parts. Another reason is that the cost of shipping may increase base on how far will be the distance and the weight of the product.
