Answer:
The current price of the common stock is $29.05
Explanation:
Cost of Equity = Rf + beta x MRP = 3% + 1.20 × 5.50% = 9.6%
Dividend in the n the year = D₀ × 
D₁ = $1.25 × 1.25 = $1.56255
D₂ = $1.5625 × 1.25 = $1.9531
D₃ = $1.9531 × 1.25 = $2.44
D₄ = $2.44 × 1.25 = $3.052
Terminal value = D₄ × 
= $3.052 x (1+0.0) ÷ (9.60 - 0.0)
= $31.79
Total value in 4th year = $3.052 + $31.79 = $34.8409
Total cash flows = $1.5625, $1.9531, $2.4414, $34.8409
(Present value Cash-flows at 9.60% ) $1.4256, $1.6260, $1.8544, $24.1461
= $29.05
Current price = $29.05
Answer:
The principle of the Software Engineering Code of Ethics that Morris has violated is:
the Product principle.
Explanation:
The Product principle requires that Morris' program (product and related modifications) should meet the highest professional standards. Staying within budget and rationalizing an error as minor are not requirements of the Software Engineering Code of Ethics that Morris subscribed to.
Other requirements of the code include acting in the best interest of the public, client, and employer; maintaining high product standards; integrity and independence in professional judgment; using an ethical approach; maintaining professional integrity and independence; being fair and supportive to colleagues; and ensuring participation in lifelong learning.
Answer:
(A). A Debit to Notes Payable for $960
Explanation:
In case of a promissory note, there are three parties to it, namely,
- Maker i.e Jones here
- Payee, to whom money is to be paid i.e the bank here
- Holder i.e the one who currently holds the promissory note i.e the bank here
Upon issue of promissory note, in the books of the maker (Jones), the entry is,
Name Of The Bank A/C Dr. $960
To Notes Payable A/C 960
(Being a promissory note issued to bank against a payment of $960)
Upon maturity i.e date of payment, the entry would be,
Notes Payable A/C Dr. $960
To Cash/Bank A/C 960
(Being payment of promissory note honored)
Thus, the correct answer would be, (A) a debit to notes payable account for $960.
Answer:
horizon value at year 5 = $94.3444
current intrinsic intrinsic value P₀ = $47.73
Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is and Goodwin's capital gains yield is <u>0(it pays no dividends)</u>.
Goodwin has been very successful, but it hasn't paid a dividend yet. It circulates a report to its key investors containing the following statement:
Goodwin's investment opportunities are poor.
Is this statement a possible explanation for why the firm hasn't paid a dividend yet?
<u>B. False</u>
Generally companies that are experiencing a rapid growth do not pay dividends, because they need all the cash that they can use to finance their expansion. Sometimes mature companies that have a steady growth rate will also choose not to pay dividends because they consider themselves as solid investments and not paying dividends allows them to grow more and should increase stockholders' wealth more.
Explanation:
D₃ = $5.50
D₄ = $7.073
D₅ = $9.096
D₆ = $9.642 (and a constant growth rate of 4.38%
Re = 14.60%
horizon value at year 5 = $9.642 / (14.6% - 4.38%) = $94.3444
intrinsic value P₀ = $94.3444 / 1.146⁵ = $47.73
