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Bogdan [553]
2 years ago
5

P. Daves Inc's stock is currently sells for $45 per share. The stock's dividend is projected to increase at a constant rate of 4

% per year. The required rate of return on the stock, rs, is 12%. What is Daves' expected price 6 years from now? a. $52.68 b. $55.12 c. $54.41 d. $56.94 e. $53.71
Business
2 answers:
Svetllana [295]2 years ago
8 0

Answer:

The price of the stock six years from now will be $56.94

Explanation:

To calculate the price of a stock that pays a dividend which grows at a constant rate forever, we use the constant growth model of DDM. The current price of stock using the constant growth model is calculated as follows,

P0 = D1 / r - g

As, we don't know the D1, that is dividend expected for the next year, we will calculate it first,

45 = D1 /  (0.12 - 0.04)

45 * (0.12-0.04)  =  D1

45 * (0.08) = D1

3.6 = D1

We use the D1 to calculate the price today. Thus, we will use D7 to calculate the price six years from now.

D7 = D1 * (1+g)^6

P6 = 3.6 * (1+0.04)^6  /  (0.12 - 0.04)

P6 = $56.939 rounded off to $56.94

Nataly_w [17]2 years ago
3 0

Answer:

$56.94

Explanation:

Growth rate=4%

Current stock price=$45

Time in year=6

Future value of stock=45*1.04^6=56.94

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A department store has budgeted sales of 12,800 men's coats in September. Management wants to have 6,800 coats in inventory at t
BigorU [14]

Answer:

Dollar amount of purchases is 1,228,400.

Explanation:

Total purchase of suits is equal to Inventory at the end plus sales minus inventory at the beggining.

  • Inventory at the beggining is 4,800
  • Inventory at the end (management desire) = 6,800
  • Budgeted sales = 12,800
  • Purchase of suits = 6,800 + 12,800 - 4,800 = 14,800

The explanation is if i have 4,800 units at the beggining, and i want to sell 12,800, i will need to purchase the difference (8,000 units). Plus the existence needed at the end, 8,000 + 6,800 = 14,800.

The cost per unit is $83, so the total cost is 14,800 * 83 = 1,228,400.

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2 years ago
N high power-distance countries such as China, employee perceived organizational support perceptions are not as deeply based on
Whitepunk [10]

Answer:

The correct answer is E

Explanation:

The expectation level by the employees are lower in the high power distance countries and the work is considered to be the moral obligations whether the firm cares for the employees or not.

Perceived firm support is the scenario which is grounded instead of the policy based. So, the difference is the level of expectation through the employees.

5 0
2 years ago
With the decline of fuel price globally, airline companies continue to reap the benefits. What impact will this have an Emirates
Assoli18 [71]

Answer: It wouldn't have any impact on Emirates business strategy in the future as Emirates 26years long plan has helped them to be at the very top of their game with continuous profit

Explanation:

It wouldn't have any impact on Emirates business strategy in the future as Emirates 26years long plan has helped them to be at the very top of their game with continuous profit. The company's human resource are lean already and they are cost effective making them to be ahead of the competitors

5 0
1 year ago
How does the buying decision process differ when consumers are shopping on the Internet or mobile device compared with shopping
LuckyWell [14K]

Explanation:

The purchase decision process on the Internet or on mobile devices compared to purchases in a physical store, differ according to the characteristics of each of the shopping environments.

According to Kotler and Keller, the consumer purchase decision process goes through 5 stages:

  1. problem or need recognition,
  2. information search,
  3. evaluation of alternatives,
  4. purchase,
  5. post-purchase behavior.

Therefore the consumer will determine which are the essential attributes when making a purchase and which ones will bring the greatest benefits.

Currently the online shopping market has grown substantially, since most individuals have access to the internet, which makes companies look for a greater online presence, which guarantees the possibility of also offering consumers greater benefits, such as greater discounts and promotions. , since, there is a reduction in systemic and physical costs when the company sells over the internet.

Therefore, online stores compared to physical stores are more likely to offer purchase and post-purchase benefits, in addition to a greater variety of products and brands available, increasing consumer choice.

4 0
2 years ago
Sue works in the finance department of a large multinational corporation. Her manager has asked her to submit a detailed report
damaskus [11]

Option C

Sue at in developing alternatives decision-making process.

<h3><u>Explanation:</u></h3>

Developing alternatives challenges decision-makers to collect data, evaluate that data, and brainstorm to develop up with various answers that can be analyzed and sorted. Inventive thinking, and imagining out of the box, are essential to growing up with a full variety of alternatives. Developing good alternatives is an iterative responsibility.

Originally, the responsibility is to create a variety of creative alternatives. The necessity to obtain a decision appears because there are several possible alternatives. Getting up with wider than one resolution empowers decision-makers to understand which one can really work.

3 0
2 years ago
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