Answer:
Return on equity(r) = 0.16
Plowback ratio(b) = 50 = 0.5
Earnings per share(EPS) = $2
D1 = 50% x $2 = $1
Cost of equity(Ke) = 0.12
Growth rate(g) = b x r
= 0.5 x 0.16
= 0.08 = 8%
Current market price(Po) = D1/Po + g
= $1/0.12 - 0.08
= $25
Market price in 3 years = Po(1+g)n
= $25(1+0.08)3
= $25(1.08)3
= $31.49
Explanation:
In this case, we need to calculate growth rate by multiplying the plowback ratio by return on equity. Then, we will calculate the current market price as shown above. Thereafter, we will subject the current market price to a 3-year growth rate to calculate the market price in 3 year's time
Answer:
stock price
earning per share
dividends per share
Explanation:
A stock split is when a company increases the number of its shares outstanding.
for example if a company has 4 million shares outstanding at a price of $20, earning per share is $1 and dividend per share is $0.50. this company announces a 2 for 1 split :
the number of outstanding shares becomes 2 x 4 million = 8 million
stock price becomes = $40 / 2 =$20
earning per share = $1 / 2 = $0.50
dividend per share = $0.5 / 2 = $0.25
The correct option is D.
Logistic alliance is said to occur in a situation where the parties in an alliance venture is made up of a provider of logistic services and a producer of a particular product and the two of them now come together to form a new system which improves the distribution of the products concerned to the customers.
Answer:
(1) $9,973.15
(2) 10.7%
Explanation:
(1) A = P(1+r)^n
A (estimated cost of the wedding) is the total amount to be saved = $52,000
r = interest rate = 3.5% = 0.035
n = duration of savings = 4 years = 4×12 = 48 months
52000 = P(1+0.035)^48
52000 P(1.035)^48
52000 = P(5.214)
P = 52000/5.214 = 9,973.15
Amount to be saved each month is $9,973.15
(2) A = P(1+r)^n
A is the total amount the coin was resold = $297,500
P is the amount the coin was purchased = $219,000
n is the duration of the investment = 3 years
297,500 = 219,000(1+r)^3
(1+r)^3 = 297,500/219,000
(1+r)^3 = 1.358
1+r = (1.358)^1/3
1+r = 1.107
r = 1.107 - 1 = 0.107 = 10.7%
