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zimovet [89]
2 years ago
8

MJ LTD is expected to grow at various rates over the next five years. The company just paid a $1.00 dividend. The company expect

s to grow at 20% for the next two years (effecting D1 and D2), then the company expects to grow at 10% for three additional years (D3, D4, D5) after which the company expects to grow at a constant rate of 5% per year indefinitely. If the required rate of return on MJ's common stock is 12%, then MJ's stock price is closest to
Business
1 answer:
Black_prince [1.1K]2 years ago
5 0

Answer:

$21.859

Explanation:

According to the scenario, computation of the given data are as follow:-

Present Value = D0 × (1 + growth rate)^time ÷ (1 + Required Rate of Return)^time period

1st Year PV = $1 × (1 + 0.20)^1 ÷ (1+ 0.12)^1

                  = 1.20 ÷ 1.12

                 = 1.071

2nd Year PV = $1 × (1 + 0.20)^2 ÷ (1+ 0.12)^2

                   = $1 × (1.44) ÷ 1.254

                  = $1.148

3rd Year PV = $1 × ( 1 + 0.20)^2 × (1 + 0.10) ÷ (1 + 0.12)^3

                    = $1 × (1.44) × (1.10) ÷ 1.405

                     = $1.127

4th Year PV = $1 × ( 1 + 0.20)^2 × (1 + 0.10)^2 ÷ ( 1 +0.12)^4

                    = $1 × (1.44) × (1.21) ÷ 1.574

                     = $1.107

5th Year PV = $1 × (1 + 0.20)^2 × ( 1 +0.10)^3 ÷ (1 + 0.12)^5

                     = $1 × (1.44) × (1.331) ÷ 1.762

                     = $1.088

6th Year PV = $1 × (1 + 0.20)^2 × (1 + .10)^3 × (1.05) ÷ [(0.12 - 0.05) × (1+.12)^5]

= $1 × (1.44) × (1.331) × (1.05) ÷ (0.07) ×  (1.762)

= $2.012 ÷ 0.1233

= $16.318

Now

Share’s Current Value is

= $1.071 + $1.148 + $1.127 + $1.107 + $1.088 + $16.318

= $21.859

We simply applied the above formula

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The following information relates to Mapfes Manufacturing Corporation for next quarter: January February March Expected sales (i
prohojiy [21]

Answer:

Number of units which company plan to produce in February is 352000

Explanation:

We have given expected sales in January, February and march is 440000, 390000 and 380000 units respectively  

And desired needing finished goods in inventory  in January, February and march is 39000, 38000 and 40000 units respectively  

We have to find the how many units company plans to producing for month February

Number of units which company plan to produce in February = 390000 - 38000 = 352000  

6 0
2 years ago
If the United States imports more than it exports, then this means that Group of answer choices the demand for dollars is likely
sladkih [1.3K]

Answer:

the supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus.

Explanation:

In Economics, there are primarily two (2) factors which affect the availability and the price at which goods and services are sold or provided, these are demand and supply.

The law of demand states that, the higher the demand for goods and services, the higher the price it would be sold all things being equal. On the other hand, law of supply states that the higher the price of goods and services, the lower the supply.

Trade can be defined as a process which typically involves the buying and selling of goods and services between a producer and the customers (consumers) at a specific period of time.

If the United States imports more than it exports, then this means that the supply of dollars is likely to exceed the demand in the foreign exchange market, ceteris paribus.

Generally, when import exceeds export there would be a deficit in the financial account of the country.

Hence, a deficit on the current account is because the value of goods and services exported is lower than the value of goods and services being imported in a particular country.

8 0
1 year ago
The Window Store will have a value of $139,000 if the economy does well this coming year and a value of $121,000 if the economy
ycow [4]

Answer:

The value of this firm to shareholders is $70240

Explanation:

Using expected value approach, the value of the firm can be computed as :

(Optimistic value*its probability)+(pessimistic value*its probability)

optimistic value=$139000 and its probability is 68%=0.68

Pessimistic value=$121000 and its probability is 1-0.68=0.32

Expected value=($139000*0.68)+($121000*0.32)

                         =$133240

However, the value to shareholders is the expected value of the firm less debt of $63000

Equity value=$133240-$63000

                      =$70240

8 0
2 years ago
10. The Wetski Water Ski Company is the world’s largest producer of water skis. As you might suspect, water skis exhibit a highl
xenn [34]

Answer: $ 30,290,000

Explanation:

For this question, the transportation table has been addressed below.

“X” indicates that there will be no possible production in the specific cell.

(i) The total cost of optimum production plan = (50,000 x 50) + (50,000 x 78) + (50,000 x 50) + (50,000 x 75) + (20,000 x 91) + (40,000 x 88) + (50,000 x 50) + (50,000 x 75) + (40,000 x 85) + (50,000 x 50) + (2,000 x 75)

= $ 30,290,000.

Therefore, the cost of the plan will be $30,290,000.

5 0
2 years ago
Alejandro's supervisor notices that sales were down in february. he asks alejandro to look up past sales figures in the company'
Nana76 [90]
Monthly sales over five years

5 0
2 years ago
Read 2 more answers
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