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Natali [406]
2 years ago
13

Canine Crates just paid an annual dividend of $.45 per share but plans to double that amount each year for three years. After th

at, the firm expects to maintain a constant dividend. What is the value of this stock today if the required return is 13 percent?a. $24.48b. $26.45c. $23.46d. $19.91e. $23.89
Business
2 answers:
Slav-nsk [51]2 years ago
7 0

Answer:

The correct answer is E ,$23.89

Explanation:

The value of the stock today can be calculated by discounting all future dividends payable by the stock with $0.9 in year 1, $1.8 in year 2,$3.6 in year 3 and in perpetuity.

In knowing the dividends in perpetuity, the $3.6 is divided by 13% cost of capital.

It is also important to know that the discounting factor in perpetuity is the same as year 3 discounting factor.

Years  Dividends           DCF=(1+r)^n                 PV

1             0.9                        0.885                  0.80  

2              1.8                         0.783                    1.41  

3             3.6                         0.693                   2.49  

4             27.69                           0.693                  19.19  

     total of present values                                    23.89  

Since $0.45 is just been paid, next year dividend will be doubled and so on.

Taya2010 [7]2 years ago
3 0

Answer:

e) $23.89

Explanation:

The question is to determine the value of Canine Crates stock today  based on a return rate of 13%

The first step is to determine the yearly value based on the dividend for three years as follows

D1= The annual dividend x 2 ( since Canine Crates plans to double the amount each year for three years

D1= $0.45 x 2 = $0.9

D2= $0.90 x 2 = $1.80

D3= $1.80 x 2 = $3.60

Based on these calculations, we calculate the value of the stock by adding the present values of the dividend of each year.

This is based on the following formula

Dividend per year / (1+r)∧n

= Dividend per year

r = required rate

n= period

Value of the stock = $0.9 / (1.13) + $1.80 / (1.13)∧2 + $3.60/ (1.13)∧3

The value of the stock = $23.89

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Ethical behavior is a subset of which skillset?
Anna71 [15]

Answer:

C). Professional Conduct

Explanation:

Ethical behavior is characterized as the obedience of moral principles like fairness, honesty, and equity. Such behavior recognizes the individual diversity and offers equal rights and respect to the dignity and integrity of every individual. It is one of <u><em>the significant aspects of 'professional conduct' which promotes professionalism, healthy work relationships, mutual understanding, and maximize the output</em></u>. Thus, <u>option C</u> is the correct answer.

7 0
2 years ago
The public relations nightmare from the U.S. Secret Service in 2015 has been attributed to a breakdown in which managerial funct
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Explanation:

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2 years ago
Taylor and Weber agreed on hiring the right worker for the job. Employee selection and promotion should be based on experience,
andrew-mc [135]

Answer:

a the formal selection process rule

Explanation:

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6 0
2 years ago
Krisp Bite, a breakfast cereal manufacturer, has a storage facility to store sugar, corn, wheat, oats, rice, and barley before t
sattari [20]

Answer:

D) inventory

Explanation:

Inventory: Inventory is the stock of the company. It passed through various cycles i.e. raw material, work in progress, finished goods. When the cycle is finished then the product is ready to sell in the market.  

Moreover, the recording of the stock is done based on the cost or market value whichever is lower.  

In the given question, operation management uses the storage facility. So, the storage facility is used to store the inventory. Here, the storage facility means the warehouse in which the company products are kept for safety measurement.

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7 0
1 year ago
At the end of July, the first month of the current fiscal year, the factory overhead account had a debit balance. Which of the f
Kruka [31]

Under applied, deferred debit describes the nature of this balance

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A deferred debit is a non-consuming expense, and is therefore marked as an expenditure temporarily. The costs are paid to the bill once the expenditures have been expended. Deferred loans usually occur in the balance sheet as a taxable asset in the accrued spending account.

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4 0
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