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scZoUnD [109]
2 years ago
7

The Connors Company's last dividend was $1.00. Its dividend growth rate is expected to be constant at 15% for 2 years, after whi

ch dividends are expected to grow at a rate of 10% forever. Connors' required return (rs) is 12%. What is Connors' current stock price?
a. $56.82
b. $58.15
c. $62.87
d. $60.07
e. $54.91
Business
1 answer:
Rina8888 [55]2 years ago
8 0

Answer:

The price of the Stock today is $60.07. So option D is the correct answer.

Explanation:

The stock price of a company's stock whose dividends grow at two different growth rates can be calculated using the two stage Gordon growth model also known as the two stage DDM.

The short term growth rate or the growth rate that is for a limited time period is taken as g1. So, g1 is 15%

The sustainable growth rate which is the growth rate that will prevail forever is taken as g2. So, g2 is 10%

The price of the stock today is,

P0 = 1 * (1+0.15)  /  (1+0.12)   +   1 * (1+0.150^2  /  (1+0.12)^2   +  

[ (1 * (1+0.15)^2 * (1+0.1)  /  (0.12 - 0.1))  /  (1+0.12)^2 ]

P0 = $60.067 rounded off to $60.07

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Assume you are the COO of Barcelona Restaurants and you are in a heated disagreement with one of your restaurant managers over h
AlexFokin [52]

Answer:

The correct answer is letter "C": Accommodating.

Explanation:

By accommodating managers have to adjust their plans according to current situations happening at the workplace. Problematic situations must be solved quickly but they can also represent a chance to spot weaknesses of the organization that should be reviewed. If a method of working shall be modified or if there is a need to use the company's resources to make adjustments on the issue, top managers have the power to do so.

Thus, <em>accommodating will be useful for the COO of Barcelona Restaurants to join his method of working with one of the manager's style.</em>

7 0
2 years ago
A private pilot wishes to insure his airplane for$200,000. The insurance company estimates that a total loss will occur with pro
Finger [1]

Answer:

The answer is: $6,900

Explanation:

To determine how much the insurance company should charge, we must first calculate the amount of money they expect to pay:

  • total loss $200,000 x 0.002 = $400
  • 50% loss $100,000 x 0.01     = $1,000
  • 25% loss $50,000 x 0.1         = $5,000

                                                 Total  $6,400

If the insurance company expects to pay $6,400 per year, they will have to charge $6,900 ($6,400 + $500) to cover their expenses and earn a $500 profit.

4 0
2 years ago
The GDP deflator for this year is calculated by dividing the using by the using and multiplying by 100. However, the CPI reflect
inysia [295]

Hello. You forgot to provide the answer options. The options are:

"A) value of all goods and services produced in the economy this year  B) This years prices  C) value of all foods and services produced in the economy this year  D) the base year's prices  E) bought by consumers"

Answer:

The GDP deflator for this year is calculated by dividing the  value of all goods and services produced in the economy this year using this years prices by the value of all foods and services produced in the economy this year using the base year's prices and multiplying by 100. However, the CPI reflects only the prices of all goods and services bought by consumers.

Explanation:

GDP deflator is an economic term that means "implicit price deflator". This term is defined as the price measure for any and all goods and services produced within the country, in the year in question. GDP, in turn, is directly related to this, since it represents the monetary value that each of these goods and services produced during that same year.

The GDP deflator is directly related to the CPI, which is another economic term intended to represent the consumer price index. Through the CPI, the GDP deflator is able to measure the inflation or deflation that occurred in the national economic sector for a given year.

The GDP deflator for this year is calculated by dividing the  value of all goods and services produced in the economy this year using this years prices by the value of all foods and services produced in the economy this year using the base year's prices and multiplying by 100. However, the CPI reflects only the prices of all goods and services bought by consumers.

6 0
2 years ago
A company has a factory that is designed so that it is most efficient (average unit cost is minimized) when producing 18,300 uni
PtichkaEL [24]

Answer: 14.9%

Explanation:

18300/12770x100%

8 0
2 years ago
Luther industries has a dividend yield of 4.5% and a cost of equity capital of 10%. luther industries' dividends are expected to
Darina [25.2K]
<span>A) 5.5%

A) rE = Div1 / P0 + g
0.1 = 0.045 + g, so g = 5.5%</span>
8 0
2 years ago
Read 2 more answers
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