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DerKrebs [107]
2 years ago
7

Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of $10.25 per share and has announced that it

will increase the dividend by $8.25 per share for each of the next four years, and then never pay another dividend. Required: If you require a return of 12 percent on the company’s stock, how much will you pay for a share today?
Business
1 answer:
olasank [31]2 years ago
7 0

Answer:

$56.19

Explanation:

Because Hot Wings' stock only pay dividend in next four years, the stock intrinsic value is sum of these four discounted dividends. Let formulate the calculation as below:

Hot Wings' stock intrinsic value = Dividend in year 1/(1 + Required rate of return) + Dividend in year 2/(1 + Required rate of return)^2 + Dividend in year 3/(1 + Required rate of return)^3 + Dividend in year 4/(1 + Required rate of return)^4

                                                     =  (10.25 + 8.25)/(1 + 12%) + (10.25 + 8.25)/(1 + 12%)^2 + (10.25 + 8.25)/(1 + 12%)^3 + (10.25 + 8.25)/(1 + 12%)^4 = $56.19

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At the end of Year 2, retained earnings for the Baker Company was $1,850. Revenue earned by the company in Year 2 was $2,100, ex
icang [17]

Answer

Retained earnings at the beginning of Year 2 was: $1,450

Explanation

Revenue = $2,100

Retained Earnings Closing Balance = $1,850

Expenses = $1,150

Dividends = $550

Retained Earnings Closing Balance = Revenue - Expenses - Dividends + Retained Earning Beginning Balance

$1,850 = $2,100 - $1,150 - $550 + Retained Earning Beginning Balance

Retained Earning Beginning Balance = $1,450

5 0
2 years ago
A major lottery advertises that it pays the winner $10 million. However, this prize money is paid at the rate of $ 500,000 each
My name is Ann [436]

Answer:

We have to discount these payments to find the present value

500,000

500,000/1.1

500,000/1.1^2

500,000/1.1^3

We keep on doing this until we reach 500,000/1.1^19

After that we add all the payments and get the value. A less time consuming way of doing it is using a financial calculator

Pv=?

N=19

FV=0

PMT=500,000

=4,182,460.05 we add 500,000 to this because the first payment was not discounted=4,682,460.05= Present Value.

Explanation:

8 0
2 years ago
Who determines who is authorized for access to areas containing sensitive devices/data/system
Alex Ar [27]

Answer:

Im thinking it is the FBI

Explanation: MY guess would point to the FBI bc they are the ones who come in on cyber related crimes. so i would say A is the correct answer

6 0
2 years ago
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For product W, a firm has an annual holding cost percentage of 20%, an ordering cost of $110 per order, and annual demand of 15,
Rudiy27

Answer:

812.40 units

Explanation:

Given that,

Annual holding cost percentage = 20%

Ordering cost = $110 per order

Annual demand = 15,000 units

Units Ordered - Price Per Unit

1-250 - $30.00

251-500 - $28.00

501-750 - $26.00

751 and up - $25.00

Optimal order quantity:

= \sqrt{\frac{2\times Annual\ demand\times Cost\ per\ order}{Holding\ cost} }

= \sqrt{\frac{2\times 15,000\times 110}{25\times0.2} }

= \sqrt{\frac{3,300,000}{5} }

= 812.40

Therefore, the optimal order quantity is 812.40 units.

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2 years ago
An analyst asked to perform a TCO analysis for a system would need to take into account
balu736 [363]
Can you dm me for the answer I’m not home rn I’m trying to help out a lot of people
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