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matrenka [14]
1 year 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]1 year 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

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Casey has ​$1 comma 000 to invest in a certificate of deposit. Her local bank offers her 2.50​% on a​ twelve-month FDIC-insured
frutty [35]

Answer:

the risk premium = return of the deposit - risk free deposit return

risk premium = 5.2% - 2.5% = 2.7% or $27 for a $1,000 CD

Besides the investment risk, Casey must also consider the inflation rate and taxes. The inflation rate lowers the real interest earned by Casey: real interest rate = nominal interest rate - inflation rate. And she must also find out how the return from the non-financial institution is taxed, if it can be taxed as capital gains or regular income.

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1 year ago
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Alenkasestr [34]

Answer:

8,000 units need to be accounted for

Explanation:

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The Units that needs to be Accounted for is the <em>Sum of</em> the units in Opening Work In Process and the units Transferred into the Assembly Department.

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2 years ago
Using these data from the comparative balance sheet of Sunta Fe Spice Company, perform horizontal analysis. (Round percentages t
frozen [14]

Answer:

75000,25%;

18000, 30%.

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Explanation:

From the question above we are given the following parameters Accounts receivable for year 2017 = $ 375,000,

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Accounts receivable for year 2016 = $ 300,000, inventory for the year 2016 = 600,000 and the Total assets for the year 2016 = 2,800,000.

Therefore, we have the following simple arithmetic(which is subtraction between the variables in the two years) to determine the solution to the question:

(375,000 - 300,000) = 75,000 = 25%(increase).

(780,000 - 600,000) = 180,000 = 30%(Increase).

(3,220,000 - 2,800,00) = 420,000 = 15%(increase).

8 0
1 year ago
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Nesterboy [21]

Answer: I would reject his demand for bribe straight away and i will recommend senior management to protect business ethics at all cost.

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I as a representative of my company would recommend senior management to take hands off from the project until appropriate actions are taken by the authority as getting into unethical actions might result in problems in future .

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The manhawkin fund has an expected return of 16% and a standard deviation of 20%. the risk-free rate is 4%. what is the reward-t
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We know that expected return is 16%. The standard deviation is 20%. And in addition, the risk-free rate is 4%. Denote with x: expected return, "Y": the risk-free rate and sigma: standard deviation. The reward-to-volatility ratio is(x-y) / (sigma) = (16-4) / 20 = .6
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