You are considering purchasing stock in Canyon Echo. You feel the company will increase its dividend at 4.6 percent indefinitely. The company just paid a dividend of $3.41 and you feel that the required return on the stock is 11 percent. What is the price per share of the company's stock?
Answers
price per share of the company's stock is $53.28
Explanation:
Under dividend growth model a stock is overvalued or undervalued assuming that the firm’s expected dividends grow at a value g forever, which is subtracted from the required rate of return or k.
Therefore, the stable dividend growth model formula calculates the fair value of the stock as P =D1 / ( k – g ).
P= price per share
D1 = current dividend
k = required return
g = growth rate
P= $3.41 ÷ (11 % - 4.6% ) =( 3.41 ÷ 0.064 )= $53.28
Related Questions
3M Co. reports beginning raw materials inventory of $930 million and ending raw materials inventory of $880 million. 3M purchased $3,956 million of raw materials and used $4,006 million of raw materials during the year. Compute raw materials inventory turnover and the number of days' sales in raw materials inventory. (Use 365 days per year. Enter your answers in millions.)
In the probabilistic approach to project network analysis, the time estimate annotated tm for any activity is the: Multiple Choice: O mean time. O marginal time. O mode time. O most likely time. O median time.
A bank system contains data on customers (identified by name and address) and their accounts. Each account has a balance and there are 2 type of accounts: one for savings which offers an interest rate, the other for investments, used to buy stocks.a. Trueb. False
Newark Company has provided the following information: Cash sales, $500,000 Credit sales, $1,400,000 Selling and administrative expenses, $380,000 Sales returns and allowances, $95,000 Gross profit, $1,410,000 Increase in accounts receivable, $60,000 Bad debt expense, $38,000 Sales discounts, $48,000 Net income, $1,030,000 How much cash was collected from customers
Answers
Answer:
In a closed economy, public saving is the amount of
d. tax revenue that the government has left after paying for its spending.
Explanation:
Public saving or budget surplus in a closed economy describes the excess of government revenue (obtained through taxation of individuals and businesses in the economy) and government expenditures on goods and services. In an open economy, transfers are deducted before arriving at the public saving. In all economies, the addition of private (individual and business) and public savings result to national investments.
For Monica (spouse) 4,000
For Chuck (son) 2,500
For Carter (Monica’s father) 5,000
Sammy and Monica’s 2019 AGI is $130,000. They file a joint return. Chuck and Carter are Sammy and Monica’s dependents.
What is Sammy and Monica’s medical expense deduction for regular income tax purposes?
Answers
Answer:
The Sammy and Monica’s medical expense deduction for regular income tax purposes is $17,750.
Explanation:
For the purpose of regular income tax, the deduction pertaining to medical expenses are available up to the extent it exceeds 10% of AGI.
Deduction available = excess expenses incurred - 7.5% of AGI
= ($16,000 + 4,000 + 2,500+5,000) - 7.5%*130000
= 27500 - 9.750
= $17,750
Therefore, The Sammy and Monica’s medical expense deduction for regular income tax purposes is $17,750.
Answers
Answer:
Explanation:
The comparison of psychological benefits to actual tangible costs depends on the individual in question. If the individual is constantly stressed to the point which the stress is affecting his/her health, work performance, mood, behavior around family, etc. then the tangible costs of going on vacation may be worth it. This is because a vacation would provide a moment of relaxation which would relieve all of that individual's stress and in doing so improve the individual's work performance, health, and overall quality of life. Therefore, the comparison between physical benefits to costs is always going to be a personal opinion.
b. Mrs. Jones will have to pay Mr. Brown the reward money because she left the posters up after Fifi had already been returned.
c. Mrs. Jones will not have to pay anyting to Mr. Brown because the offer was not communicated to him before he returned Fifi.
d. Mrs. Jomes will ot need to pay Mr. Brown the reward money because it is a unilateral contract.
Answers
If Mr. Brown later sees one of the posters and asks Mrs. Jones for the reward money: Mrs. Jone will have to pay Mr. Brown the reward money because she made a public offer. Thus the correct option is A.
What is a poster?
A poster is refer to a graphical or pictorial representation of any idea to promote or support something. These posters are utilized for advertisement or to create awareness among citizens regarding any issue or challenges faced in society.
In the given case, it is explained that In her neighborhood, Mrs. Jones posts posters announcing a prize for the safe return of her dog Fifi. Fifi is located and delivered by Mr. Brown, who is unaware of the posters.
The reward is something that is presented or given in exchange for some service or achievement, or that is received in exchange for good or bad. Due to her public offer, Mrs. Jone will be obligated to pay Mr. Brown the reward amount.
Therefore, option A is appropriate.
Learn more about Reward, here:
#SPJ5
A :)
Im 99% sure it’s right, really hope it is!
Answers
Answer:
The correct answer is letter "B": Make the customers less sensitive to the price.
Explanation:
There are several reasons that could make products become elastic or inelastic. Reputation typically makes goods and services be considered inelastic. These types of products do not see a change in their quantity demanded in front of changes in price.
Thus, if a Swiss watch company promotes their history of superior craftsmanship is attempting to aware consumers about its watch quality and reputation so if they decide to increase prices consumers will be less sensitive to the change.
Answers
Explanation:
The journal entries are shown below:
On July 15:
Purchase A/c Dr $97,020
To Accounts payable $97,020
(By buying goods on credit with discount), the following are shown in the estimates of tire sales following application of the discount:
= Number of tires × price per tire - discount rate
= 2,200 tires × $45 - 2%
= $99,000 - $1,980
= $97,020
On July 23:
Account payable A/c Dr $97,020
To Cash A/c $97,020
(Being payment is made)
On August 15:
Account payable A/c Dr $97,020
Interest expense A/c Dr $1,980
To Cash A/c $99,000
(Being payment is made on late interval)