Answer:
Explanation:
the pictures attached shows the solution to the problem simultaneously
Answer:
$44.87
Explanation:
Use Dividend Discount Model to solve this question;
First, find the dividend per year;
First year's dividend ; D1 = D0(1+g)
D1 = 1.32 (1.30) = 1.716
Second year's dividend ; D2 = 1.716 (1.10) = 1.8876
Third year's dividend ; D3 = 1.8876 (1.05) = 1.9820
Next, find the present value of each dividend at 9% required return;
PV (D1) = 1.716 / (1.09) = <em>1.5743</em>
PV (D2) = 1.8876 /(1.09²) = <em>1.5888</em>
PV (D3 onwards) = 
= PV (D3 onwards) = <em>41.7052</em>
Sum up the PVs to find the current market value of the stock;
= 1.5743 + 1.5888 + 41.7052
= 44.8683
Therefore the value is $44.87
Answer:
The impact of spending $50,000 on the research and development for a new drug to to cure liver damage will increase the expenses of the Morgan Pharmaceutical in the years financial statements.
Explanation:
Morgan pharmaceutical is pending $50,000 on he research and development of new drug which can cure the liver damage, from this spending company is expecting that after they have successfully created new drug it will lead to the increase in sales , which will ultimately lead to increase in profits , which then would totally recover the initial cost incurred on research and development but until then these expenses would be shown in the current years financial statement as expenses, and thus would increase the total expenses of the company.
Answer:
<em>3.57% per Annum or 0.0357</em>
Explanation:
Recall that,
By Taking a long position in two of the 4% coupon bonds and a short position in one of the 8% coupon bonds it results in the following
The Year 0: 90- 2 x 80 = -70
The Year 10: 200- 100 = 100
Since both coupons cancel each other.
In 10 years time a $100 will be the same to $70 today.
The 10-year rate, R, (10-year-rate) is given as,
The rate is 1/10 in 100/70 =0.0357 or 3.57% per year.
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