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IceJOKER [234]
1 year ago
7

World-Tour Co. has just now paid a dividend of $2.83 per share (Div0); its dividends are expected to grow at a constant rate of

6 percent per year forever. If the required rate of return on the stock is 16 percent, what is the current value of the stock, after paying the dividend
Business
1 answer:
levacccp [35]1 year ago
4 0

Answer:

the current value of the stock is $30

Explanation:

The computation of the current value of the stock is given below:

Price of stock today is

= Dividend per share × (1 + growth rate) ÷  (required rate of return - growth rate)

= $2.83 × (1 + 0.06) ÷  (0.16 - 0.06)

= $2.9998 ÷ 0.10

= $29.9980  

= $30

Hence, the current value of the stock is $30

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Josh wants to convey his best wishes to Jonathan for a meeting scheduled later during the day. Which business document would be
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A hedge fund with net asset value of $71 per share currently has a high water mark of $78. Suppose it is January 1, the standard
Leto [7]

Answer:

Answer :The annual incentive fees according to Black Scholes Formular =2.5

Explanation:

a)Find the value of call option using below parameter

current price (st)=$71

Strike price(X)=$78

Rf=4%

std=42%

time=1

value of call option=15.555

Annual incentive=16% x 15.555=2.5

The annual incentive fees according to Black Scholes Formular =2.5

(b) The value of annual incentive fee if the fund had no high water mark and it earned its incentive fee on its return in excess of the risk-free rate? (Treat the risk-free rate as a continuously compounded value to maintain consistency with the Black-Scholes formula.)

current price (st)=71

Strike price(X)=78

Rf=(e^4%)-1 = 4.08%

std=42%

time=1

value of call option=17.319

Annual incentive=16% x 17.319=2.77

7 0
2 years ago
Ned's Natural Foods sells unshelled peanuts by the pound Historically, Ned has observed that daily demand is normally distribute
labwork [276]

Answer:

a) 749

b) 4.073

Explanation:

Given:

Mean = demand = 80 pounds

Standard deviation of demand = 10 pounds

Lead time = 8 days

Standard deviation of lead time = 1 day

a) What ROP would provide a stock out risk of 10 percent during lead time.

To find this re-order point (ROP) quantity, take the formula:

ROP = d(LT) + z \sqrt{ LT \sigma_d ^2 +  LT^2 \sigma_L_T ^2}

Here, service level = 100%-10% = 90%,

Thus z at 90% = ±1.28

ROP = 80(8) + 1.28 \sqrt{8* 10^2 +  (8)^2*(1)^2}

ROP = 640 + 1.28\sqrt{800 +  64}

= 640 + 1.28* 84.85

= 748.61

≈ 749 units

b) What is the expected number of units (pounds) short per cycle.

Find the number of units shorts per cycle. Take the formula:

E(n) = E(z) * \sigma d_L_T

[

Where E(z) = standardized number of shorts = 0.048

\sigma d_L_T = standard deviation of lead time demand = 84.85

Therefore,

E(n) = 0.048 * 84.85

= 4.073

3 0
1 year ago
On January 1, 2019, Shay Company issues $350,000 of 10%, 15-year bonds. The bonds sell for $342,125. Six years later, on January
dusya [7]

Answer:

The bonds sell for $342,125. Six years later, on January 1, 2025, Shay retires these bonds by buying them on the open market for $365,750. All interest is accounted for and paid through December 31, 2024, the day before the purchase. The straight-line method is used to amortize any bond discount. 1. What is the amount of the discount on the bonds at issuance? 2. How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2019, through December 31, 2024? 3. What is the carrying (book) value

Explanation:

The bonds sell for $342,125. Six years later, on January 1, 2025, Shay retires these bonds by buying them on the open market for $365,750. All interest is accounted for and paid through December 31, 2024, the day before the purchase. The straight-line method is used to amortize any bond discount. 1. What is the amount of the discount on the bonds at issuance? 2. How much amortization of the discount is recorded on the bonds for the entire period from January 1, 2019, through December 31, 2024? 3. What is the carrying (book) value

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