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
ladessa [460]
3 years ago
9

Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends.

However, investors expect Computech to begin paying dividends, beginning with a dividend of $0.75 coming 3 years from today. The dividend should grow rapidly - at a rate of 49% per year - during Years 4 and 5, but after Year 5, growth should be a constant 10% per year. If the required return on Computech is 18%, what is the value of the stock today? Do not round intermediate calculations. Round your answer to the nearest cent.
Business
1 answer:
klasskru [66]3 years ago
7 0

If the required return on Computech is 18% the value of the stock in today's calculation is $11.77

<h3>What is the growth rate of a stock?</h3>

This is the percentage change of the stock based on the annualized growth rate over a period of time.

D3 = $0.75

D4 = 0.75 x 1.49 = $1.1175

D5 = 1.1175 x 1.49 = $1.665075

D6 = $1.665075 x 1.10 = $1.8315825

At a growth rate of 10 percent

\frac{D6}{R-G}

1.8315825/0.18-0.10

= $\frac{0.75}{1.18^3} +\frac{1.1175}{1.18^4} +\frac{1.665075}{1.18^5} +\frac{22.89478125}{1.18^5} \\

= 0.456473 + 0.576394 + 0.7278196 + 10.0075198

= $11.77

The value of this stock today is  $11.77

Read more on stocks here: brainly.com/question/25818989

You might be interested in
One disadvantage of a functional structure is that it cannot be converted into an ambidextrous structure. frequently lacks effec
soldier1979 [14.2K]

Frequently lacks effective communication channels across departments. Communication between departments can be an issue in this structure.

8 0
4 years ago
Jones Company has notes receivable that have a fair value of $950,000 and a carrying amount of $1,250,000. Jones decides on Dece
Nutka1998 [239]

Answer:

B) Unrealized Holding Gain or Loss-Income. 300,000

Notes Receivable 300,000

Explanation:

December 31, 2017 realized losses:

  • Dr Unrealized Holding Gain or Loss―Income 300,000
  • Cr Notes Receivable 300,000

Since the carrying value of the notes receivable was $300,000 higher than their fair market value, it means that the company will lose money.

Since the company is losing money, it should debit the Unrealized Holding Gain or Loss―Income account. Gains are credited and losses are debited.

5 0
4 years ago
__________ values and norms are exhibited by employees based on their observations of what actually goes on in the organization.
abruzzese [7]

Based on their observations of what actually occurs in the organization, employees demonstrate the enacted values and norms.

Your values are the things you hold dear in terms of how you conduct your life and career. Value indicates the significance of an action or thing in ethics and social sciences. Values include things like money, allegiance, independence, fairness, equality, justice, brotherhood, and friendship. Values include things like money, allegiance, independence, fairness, equality, justice, brotherhood, and friendship. In the social sciences, norms are a key notion. Norms are most frequently described as socially imposed laws or expectations. Norms can be prescriptive (encouraging good behavior, such as "be honest") or proscriptive (forbidding bad behavior, such as "do not cheat").

Learn more about Norms here

brainly.com/question/15706409

#SPJ4

8 0
1 year ago
Read 2 more answers
Kristen's financial advisor has given her a list of potential investments and has asked her to select and rank her favorite. in
cestrela7 [59]

Kristen's monetary marketing consultant has given her a list of potential investments and has requested her to pick and rank her favored in 1680 extraordinary ways Kristen can rank the 4 investments.

Variety of ways that we will select four investments out of 8 investments is the same as C(8, four) = 70 [Without order]

Now those four investments can be organized in 4! = 24 distinct ways

for this reason, total variety of ways = 70×24 = 1680

There are 1680 one-of-a-kind approaches Kristen can rank the four investments.

Potential investments means a capability investment which we're considering making to a Borrower the important thing facts and records on which can be proven on each Lender's Dashboard and on which each Lender may additionally post a Bid. Payback length is the simplest approach to evaluating an investment. It measures the period of time funding takes to pay for itself by dividing the cost of the funding by the yearly cash flows generated by means of the funding.

investment definition is an asset acquired or invested in to build wealth and keep money from the difficult earned profits or appreciation. investment which means broadly speaking to gain an extra supply of earnings or gain benefit from the investment over a selected period of time.

Learn more about Potential investments here: brainly.com/question/11514232

#SPJ4

6 0
2 years ago
A company has a unit contribution margin of $190 and a contribution margin ratio of 40%. what is the unit selling price
myrzilka [38]

I'm pretty sure it's 76 because 40% has to be turned into a decimal which is 0.4 and then you multiply that by 190 and you get 76

7 0
3 years ago
Other questions:
  • Financial assets Group of answer choices
    10·1 answer
  • Enrico is on his way to the mall to purchase a pair of running shoes. Assume he has established three minimal standards that a s
    15·1 answer
  • Fast tracking is an example of a tool used in _____ management.
    15·1 answer
  • Which of the following statements is false? A. The maximum nonrefundable amount of the child tax credit is $2,000 per qualifying
    13·1 answer
  • The budgeting process does not involve which of the following activities?
    13·1 answer
  • What kinda of block can result from poor language skills
    13·1 answer
  • Pearl Corporation earned $380,000 during a period when it had an average of 100,000 shares of common stock outstanding. The comm
    11·1 answer
  • What are some of the benefits of regional integration?
    8·1 answer
  • Mike Finley wishes to become a millionaire. His money market fund has a balance of $403,884 and has a guaranteed interest rate o
    11·1 answer
  • What is the meaning of life​
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!