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fiasKO [112]
1 year ago
15

The Brown Company just announced that they will be increasing their annual dividend to $1.68 next year and that future dividends

will be increased by 2.5% annually. How much would you be willing to pay for one share of the Brown Company stock if you require a 12% rate of return?
Business
1 answer:
stepladder [879]1 year ago
5 0

Answer:

Current price of Brown Company = $17.68

Explanation:

Using dividend growth model we have

P_0 = \frac{D_1}{K_e\: -\: g}

Where,P_0 = Current price of share

D_1 = Dividend to be paid at year end = $1.68 as provided,

K_e = Cost of equity or expected return on equity = 12% as provided,

g = growth rate = 2.5% as provided,

Now putting the values in above we have

P_0 = \frac{1.68}{0.12 - 0.025}

P_0 = \frac{1.68}{0.095}

P_0 = 17.68

Current price of Brown Company = $17.68

This is the price every person would be willing to pay at current level.

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pshichka [43]

The correct answer is D. Geographic segmentation

Explanation:

Segmentation is a common business strategy that implies considering customers according to different features such as location, cultural values, buying behavior, etc. and creating marketing plans based on this. In the case of geographic segmentation, this occurs if customers are considered according to location, for example by dividing the market or customers according to the city, state, country, etc. or according to population density. This second strategy is the one used by Altacey as the money, employees, products, and other factors are assigned based on density. Thus, the segmentation is geographic.

4 0
2 years ago
Orange Superstore is largely customer centric and economical in its methods. The store sells the best quality products at prices
balandron [24]

Answer:

The correct answer is letter "D": cost advantage strategy.

Explanation:

Cost advantage strategy is a technique implemented by companies to provide equal benefits to consumers at a lower price than competitors. Firms achieve this practice by maximizing the utilization of technology, processes, and resources. If a company implements and sustains operations with a cost advantage strategy it is said it has obtained a comparative advantage.

7 0
1 year ago
Molly C. has just purchased a pasta manufacturing business. Molly’s new business produces ravioli, tortellini, and other cheese-
Juli2301 [7.4K]

Answer:

The correct answer is C.

Explanation:

Giving the following information:

Molly estimates that she will use 10,000 pounds of cheese filling each month. The costs associated with each pound of cheese filling consist of $10.64 direct materials, $14.96 direct labor, $14.60 variable overhead, and $13.00 fixed overhead. Pasta Specialties (PS) has approached Molly and offered to supply 10,000 pounds of cheese filling each month for $405,200.

Make in house:

Unitary cost= 10.64 + 14.96 + 14.60= $40.2

Nose of the fixed cost are avoidable, therefore they are taken into account to make the decition.

Buy= 405,200/10,000= $40.52

Cost difference= 40.2 - 40.52= -0.32

8 0
2 years ago
Carlos is the manager of an American company. He expects the value of the British pound to appreciate in the near future and so
Inga [223]

<u>Answer:</u> Speculation.

<u>Explanation:</u>

Carlos tries to make a profit through exchange rates. Carlos is a speculator who tries to make profit through market fluctuations. The strategy is a risky strategy as the speculators based on their knowledge about the market make decisions accordingly.

Carlos is planning to receive the appreciated value of British Pounds so that he receives the same amount as mentioned in the contract but makes profit out of exchange rates and books FX profits in his books of accounts.

3 0
2 years ago
John is an electrician who runs his own small shop. When tax season comes, he hires an accountant from one of "the Big Four" acc
Alex Ar [27]

Answer:

When tax season comes, he hires an accountant from one of "the Big Four" accounting firms to help him file his business's tax return. In this scenario, John has most likely hired a <u>Tax</u> Accountant

Explanation:

A Tax Accountant helps the individual or businesses that hire them fill out their tax forms properly, advise them about future financial moves that can affect their taxes and file taxes with the appropriate documentation electronically so that your clients receive their refunds as quickly as possible.

They can work as a direct employee or as an independent contractor who runs their own business.

They take charge of tax preparation and help your clients to lower their tax obligations when filing tax returns.

If an individual is audited, they handle this audit for them to ensure that the individual gets through the process unharmed.

8 0
1 year ago
Read 2 more answers
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