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Alona [7]
2 years ago
13

Global Tek plans on increasing its annual dividend by 15 percent a year for the next four years and then decreasing the growth r

ate to 2.5 percent per year. The company just paid its annual dividend in the amount of $.20 per share. What is the current value of one share of this stock if the required rate of return is 17.4 percent?a. $1.82 b. $218 c. $2.03 d. $2.71 e. $3.05
Business
1 answer:
ad-work [718]2 years ago
6 0

Answer:

A) $1.82

Explanation:

the dividends discount model is used to determine the value of stock given the distributed dividends and the required rate of return:

current dividend $0.20 per stock

dividends year 1 =  $0.23 per stock

dividends year 2 =  $0.2645 per stock

dividends year 3 =  $0.3042 per stock

dividends year 4 =  $0.35 per stock

after year 4, we need to calculate the growing perpetuity = dividend / (return rate - growth rate) = $0.35 / (17.4% - 2.5%) = $0.35 / 14.9% = $2.35

now we must find the present value of the cash flows:

PV = $0.23/1.174 + $0.2645/1.174² + $0.3042/1.174³ + $0.35/1.174⁴ + $2.35/1.174⁵ = $0.1959 + $0.1919 + $0.188 + $0.1842 + $1.0537 = $1.82

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erastovalidia [21]
The correct order for the steps of the policy cycle is the first statement, the second statement, the fourth statement, and the third statement. The problem must be identified first before choosing the best policy to address it. After the best policy is chosen, implementing the policy would be the best option to see the effect. The last step is to evaluate the policy so the government and the public to ensure that the chosen policy is really the best option for the problem.
5 0
2 years ago
A business consultant earns a flat fee for his work as well as an hourly fee. He charges his clients at a rate of $75 per hour.
Delicious77 [7]
Well...if he earns $75 an hour....and he worked for 20 hours...that's
75 * 20 which = 1500
Now it says he also earns a flat fee....since the question states he billed the client 1800...and he only earned 1500 of it...that must mean that his flat fee would be
1800 - 1500 = 300
So his flat fee is 300...and his variable charge...is 75x (75 dollars per hour)
in an equation...this would look like
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4 0
2 years ago
When launching any technology product, a firm such as GoPro must create a balance between what is technically possible and wheth
guapka [62]

Answer:

Whether the technology provides benefits and responds to customers needs

Explanation:

Technological innovation can be defined as the introduction of new technical products and services or improving an existing ones.

One major reason for this is to address human needs and better serve individual . Therefore whenever any firm wants to launch any new product , it is important that it must create a balance between what is technically possible and whether the new technology provides benefits and responds to customers needs.

3 0
2 years ago
Procter and Gamble​ (PG) paid an annual dividend of $ 2.87 in 2018. You expect PG to increase its dividends by 8.0 % per year fo
nata0808 [166]

Answer:

$73.47

Explanation:

2.87 is the current dividend paid (D0)

Use that to find dividends for the next 5 years;

D1 = D0(1+g) ; g being the growth rate

D1 = 2.87(1.08) = 3.0996

D2 = 3.0996(1.08) = 3.3476

D3 =3.3476(1.08) = 3.6154

D4 = 3.6154(1.08) = 3.9046

D5 = 3.9046(1.08) = 4.2170

Next, find terminal cashflows;

D6 (yr 2024) = 4.2170 (1.03) = 4.3435

Find Present values of all the dividends using the 8% discount rate with the formula; PV = FV/(1+r)^{n}

PV(D1) = 2.87

PV(D2) = 2.87

PV(D3) = 2.87

PV(D4)= 2.87

PV(D5)= 2.87

PV of terminal value; PV(D6 onwards) = \frac{\frac{4.3435}{(0.08-0.03)} }{1.08^{5} }  = 59.1223

Sum up the PVs to find value per share;

$2.87 +$2.87 +$2.87 +$2.87 +$2.87+ $59.1223 = $73.47

8 0
2 years ago
Lenci Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and
Scrat [10]

Solution:

Manufacturing overhead expense volatility will be determined by subtracting the overhead cost of output from the total overhead cost of production according to the adjustable budget.

(Manufacturing overhead cost as per flexible budget) =

(Actual units x Variable manufacturing overhead per unit +Fixed manufacturing overhead  )

= (5,050 x $1.30)+ $41,500 = $48,065  

Actual manufacturing overhead cost = $47,905

Therefore, Manufacturing overhead spending variance

= $48,065 - $47,905 = $160

The deviation is positive as the real expense is smaller than the adjustable cost of the program.

6 0
2 years ago
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