Answer:
Stock price now is $65.08
Stock price in 3 years is $78.61
Stock price in 15 years is $ 167.38
Explanation:
The current price of the stock is given by the stock price formula below:
stock price=Di*(1+g)/k-g
Di is the dividend just paid of $2.75 per share.
g is the growth rate of dividend of 6.5%
k is the investors' expected return of 11%
stock price=$2.75*(1+6.5%)/(11%-6.5%)=$ 65.08
In calculating stock price in 3 and 15 years,we use the future value formula
FV=PV*(1+r)^n
PV is the current price
r is the growth rate whereas the n is the number of years
Stock in 3 years=$65.08*(1+6.5%)^3=$78.61
Stock in 15 years=$65.08*(1+6.5%)^15=$ 167.38
Answer: Credit, income statement
Explanation: Revenues refers to the amount of income a business receives from its customers by performing their core activities.
Credit balance in an account depicts that the relative account is your property and someone owes you that balance. As noted earlier, revenue is the amount earned by the company and is owed by the customers , therefore, it has a credit balance.
Income statement refers to the statement that depicts the performance of the firm for the year and is used to ascertain profit. Revenue is recorded in the income statement so that after deducting the expenses, income could be ascertained.