answer.
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
matrenka [14]
2 years ago
15

Deluxe Company expects to pay a dividend of $2 per share at the end of year 1, $3 per share at the end of year 2, and then be so

ld for $32 per share at the end of year 2. If the required rate of return on the stock is 15 percent, what is the current market value of the stock?
Business
1 answer:
dmitriy555 [2]2 years ago
4 0

Answer:

The current price of the stock is $28.20

Explanation:

The stock rate of return is 15% this includes both, the dividends and capital gains. Therefore, we should discount our expected cash flow at the required return rate:

Year 1:

2 / (1 + 0.15) = 2 / 1.15 = 1.73913

Year 2:

(3 dividends + 32 stock) / 1.15^2 = 35/ 1.3225 = 26.4650

<u>Then we add both discounted cash flow:</u>

1.73913 + 26.4650 = 28.20413

You might be interested in
It is increasingly difficult for a firm to develop and sustain a competitive advantage because of the effects of globalization a
Alexus [3.1K]

Answer:

a. the rapid development of the Internet's capabilities.

Explanation:

It is increasingly difficult for a firm to develop and sustain a competitive advantage because of the effects of globalization and the rapid development of the Internet's capabilities.

Globalization can be defined as the process of developing technology, people, investments, informations, products in order to create international influences across cultures and national markets or borders. This makes it possible for various multinational enterprise or companies to break into different markets across world and compete effectively with other companies.

Also, the rapid development of the Internet's capabilities gives various companies the ability and privilege to technology and software applications to seamlessly meet the needs of customers over the web such as cloud computing services, Internet of things (IoT) etc.

7 0
1 year ago
Champagne, inc., had revenues of $12 million, cash operating expenses of $8 million, and depreciation and amortization of $1.5 m
Hoochie [10]

The free cash flow can be calculated as below:

Revenue 12000000

Less: Expense (8000000)

Less: Depreciation (1500000)

Earnings Before Tax 2500000

Less Tax (750000)

Earnings after tax 1750000

Add Depreciation 1500000

Total Cash Earnings 3250000

Less: Change in Working Capital (500000)

Less : Purchase of Asset (700000)

Free Cash Flow 2050000

Thus Free Cash Flow can be calculated as above.

4 0
2 years ago
There are simultaneous changes in the demand for and supply of tablet​ devices, with the consequences being an unambiguous decre
lord [1]

Answer: c. Demand decreases and supply decreases.

Explanation:

When demand for tablets decrease, the demand curve shifts to the right. The price and quantity declines. At the same time, when supply also falls, the supply curve shifts to the left leading to an increase in price and a fall in quantity.

Since, decrease in demand and supply have opposite effect on the price there is no change in the price of tablets.

Both the forces work towards reducing quantity to quantity will fall unambiguously.

Thus, the correct option is c, Demand decreases and supply decreases.

3 0
2 years ago
You are working on a team that is designing a new drug. For this drug to work, it must enter the cytoplasm of specific target ce
LuckyWell [14K]

Answer:

The correct answer is

d. the similarity of the drug molecule to other molecules that are transported into the target cells

good luck

4 0
2 years ago
Further From Center has 10,700 shares of common stock outstanding at a price of $41 per share. It also has 240 shares of preferr
DanielleElmas [232]

Answer:

capital structure weight is = 0.349

Explanation:

Given data:

Number of share 10,700

per share price is $41

number of share of stock is 240

per share price of preferred stock is $92

number of bonds 570

coupon rate is 6% paid semiannually

mutuarity life of bonds is 22 year

face value of bonds is $1000

selling price 104.5% per par

common stock = 10,700 \times $41 = 438,700

Preferred stock  = 240\times 92 = 222,080

Bonds = 570\times 1000\times 1.045  = 595,650

Total amount = 438,700 + 222,080+595,650 = 1,256,430

capital structure weight is = \frac{438,700}{1,256,430} = 0.349

8 0
2 years ago
Other questions:
  • Jack and diane each buy pizza and paperback novels. pizza costs $3 per slice, and paperback novels cost $5 each. jack has a budg
    8·1 answer
  • A consumer lives on a diet of solely steak and potatoes. Her budget is ​$30 for every 10 days and she must buy enough potatoes t
    13·1 answer
  • Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when
    14·1 answer
  • Paxton Co. signed contracts for the purchase of raw materials to be executed the following year at a firm price of $5 million. T
    10·1 answer
  • Zumbahlen Inc. has the following balance sheet. How much total operating capital does the firm have?
    13·1 answer
  • Most business processes are cross-functional or cross-departmental processes that span the entire organization. Which of the bel
    8·1 answer
  • During the current year, Swallow Corporation, a calendar year C corporation, has the following transactions. Income from operati
    10·1 answer
  • Fun Foods Inc. is a snack manufacturer that wants to expand globally. Few people abroad are familiar with Fun Foods snacks. The
    13·2 answers
  • Lindsay is training two new sales representatives, Lance and Ayden, to use the revised client-tracking database, which has been
    7·1 answer
  • Imagine that you earned $8,425 in one year. If the government enforces a 15% income tax, how much money would you owe in taxes a
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!