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tatiyna
2 years ago
7

Red Sun Rising just paid a dividend of $2.01 per share. The company said that it will increase the dividend by 25 percent and 20

over the next two years, respectively. After that, the company is expected to increase its annual dividend at 3.1 percent. If the required return is 10.1 percent, what is the stock price today
Business
1 answer:
Elden [556K]2 years ago
3 0

Answer:

$41.40

Explanation:

For computing the stock price for today first we have to do the following calculations

Dividend at year 0 = D0 = $2.01

Dividend at year 1 = D1 = $2.01 × 1.25 = $2.5125

Dividend at year 2 = D2 = $2.5125 × 1.20 = $3.015

Now, we have to determine the price for year 2

P2 = D2 × (1 + growth rate) ÷ (required rate of return - growth rate)

= $3.015 × 1.031 ÷ (0.101-0.031)

= $44.4066

And, finally  

Current price is

= $2.5125 ÷ 1.101 + $3.015 ÷ 1.101^2 + $44.4066 ÷ 1.101^2

= $41.40

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Answer:

alliteration

Explanation:

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2 years ago
Order the bond types below from lowest to highest risk of default.
Ymorist [56]

Answer:

According to the risk of default from lowest to highest:

1. U.S. Treasury bonds.

2. Corporate bonds.

3. Junk bonds

Explanation:

Bonds are ways through which a governments and corporations are able to raise money in-order to finance the big projects.

It is issued to the public through a mapped out auction based in months or years validity. <em>And, by buying a bond, you're giving the issuer a loan, and they agree to pay you back the face value of the loan on a specific date, and to pay you periodic interest payments.</em>

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2 years ago
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Suppose you are the marketing manager for Fruit of the Loom. An individual's inverse demand for Fruit of the Loom women's underw
anzhelika [568]

Answer:  Profit of charging the optimal block price is 73.5 cent or $0.74.

Explanation:

Given that,

The inverse demand function: P = 25 − 3Q (in cents)

Cost of producing = C(Q) = 1 + 4Q (in cents)

By charging the optimal block price, the firm produce at a point where

Price = Marginal Cost (MC)

MC = 4

Therefore,

25 − 3Q = 4

Q = 7

Consumer Surplus = Profit of charging the optimal block price=0.5 × (y-intercept of the demand curve -MC) × Q

= 0.5(25 - 4) × 7

= 73.5 cent

It is equivalent to $0.74.

7 0
2 years ago
After a meeting with the operations manager of your organization, you close the door to your office so you can think of strategi
shepuryov [24]

Answer:(1) The HR professional should have read the company policy and employment contract of each employees (2) Proper employees files should be maintained (3) order a reverse of the 11 percent pay increase untill the issue leading to the increase is looked into (4) The grievance will be on employee compensation and benefit (5) I will use the employee grievance process .

Explanation:

The human resources management is the process of supporting the accomplishment of organization objective by recruiting the needed human resources into the organization, integrating them into the organization as well as developing their potential for the overall benefit of the organization. The human resources management department is responsible for the personnel matters in the organization. In every organization, they usually have a company policy which is focused on how to resolve employees grievance in the organization. Therefore, as regard the case under review the HR professional should do the following to handle the issue at hand

(1) The HR manager should read the company policy on how a pay raise should be given to each employees, in addition to this the HR manager must also read the employment contract of each employees in order to know if the employees actually deserve a pay raise.

(2) with a view to prevent this in the future, the HR professional should ensure that employees files are properly maintained and before a pay raise can be granted to any employees in the future it should be in accordance with the contract agreement surrounding pay increases.

(3) The 11 percent pay raise that was already promised to the employees will be order to reversed back to the status quo untill the matter is looked into holistically to know if the employee actually deserve to have a pay raise in accordance with contract agreement surrounding pay increases.

(4) The grievance would be a formal notice to the management to register their dissatisfaction as regard the pay increase granted to only one employee that does not go across board.

(5) I will settle the grievances before involving other members of the grievance committee, I will then held a meeting with the representatives of the workers in private.then if the issue cannot be resolved at that level, I will investigate the matter further and the result will be made known to the workers and if the workers is not satisfied the matter will go to the management level where the fact of the matter will be looked into and a decision will be made to settle the grievance.

7 0
2 years ago
clarissa wants to fund a growing perpetuity that will pay $5000 per year to a local museum, starting next year. She wants the an
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Answer:

$166,666.67

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She wants the annual amount paid to the museum to grow by 5% per year

= 5/100

= 0.05

The interest rate is 8%

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= 0.08

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Pvo= $5,000/(0.08-0.05)

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Hence Clarissa needs $166,666.67 to fund the perpetuity.

4 0
2 years ago
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