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Sonja [21]
2 years ago
6

DT Motors paid its first annual dividend yesterday in the amount of $.15 a share. The company plans to double the dividend in ea

ch of the next 3 years. Starting in Year 4, the firm plans to pay $1.50 a share indefinitely. What is one share of this stock worth today if the market rate of return on similar securities is 13.8 percent?
Business
1 answer:
devlian [24]2 years ago
5 0

Answer:

Price = $8.92

Explanation:

Dividend from yr1 to yr3 will be multiplied by 2 since it doubles per year;

D1 = $0.15*2 = $0.30

D2 = $0.30 *2 = $0.60

D3 = $0.60 *2 = $1.20

D4 (onwards) = $1.50

Next, find the present value (PV) of each dividend;

PV(D1) = 0.30/(1.138) = 0.2636

PV (D2) = 0.60/(1.138²)= 0.4633

PV(D3 ) = 1.20/ (1.138³) = 0.8142

PV(D4 onwards) = \frac{[\frac{1.50}{0.138} ]}{1.138^{3} } = 7.3754

To find the price of the stock today, sum up present values above;

= 0.2636 + 0.4633 + 0.8142 + 7.3754

Price = $8.92

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Gabe's Granola Bars had coffee mugs created with their company logo and passed them out on a busy Saturday at a popular grocery
kozerog [31]

Answer:

It would be an example of advertising.

Explanation:

This is because Gabe's Granola Bars are giving coffee mugs with their logo at a grocery store, not their own location.

I hope this helped!

5 0
1 year ago
Read 2 more answers
Assume that demand for bottled water is relatively price elastic. An increase in supply of bottled water will result in which of
DENIUS [597]

Answer:

3 then 1

Explanation:

Supply is said to be increased when the quantity supplied expands but the price and quantity demanded remains unchanged. As quantity supplied has increased whereas the quantity demanded is what it was before this change, there is first a surplus of bottled water in the market. This surplus will have a downward pressure on price, reducing the quantity supplied a bit and, as the law of demand suggests ,the quantity demanded will increase. Given that the demand is relatively price elastic, the change in quantity demanded will be greater than the change in price. Therefore the revenue will increase.

3 0
1 year ago
EB17.
nekit [7.7K]

Answer:

$600 unfavorable

Explanation:

The budgeted cost of producing 14,000 units at $5.50 per unit and with fixed costs of $19,400 is:

B = 14,000*5.50 + 19,400\\B= \$96,400

The variance is given by subtracting the budgeted cost by the actual cost ($97,000):

V= \$96,400 - \$97,000\\V= -\$600

Since the variance is negative, the variance is unfavorable

6 0
2 years ago
Answer the following question based on the article "The Mystery of Original Sin: We Don't Know Why God Permitted the Fall, but W
Alexandra [31]

Answer:

D) He wants us to learn that having Him at the center of our lives will always be the best for us no matter how big or small the decisions we must face.

Explanation:

The article exposes that dehumanization is part of the world we're living in today. Marguerite Shuster argues that the world we're living in today is Genesis 3 world.

What's wrong with this world? "As the story goes, Chesterton responded with just two words: "I am." His answer is unlikely to be popular with a generation schooled to cultivate self-esteem, to pursue its passions and chase self-fulfillment first and foremost."

Then Shuster's invitation is to recenter our lives at Him.

References:

Shuster , M. (2013). The Mystery of Original Sin: We don’t know why God permitted the Fall, but we know all too well the evil and sin that still plague us. Christianity Today, 57(3), 38-41

Shuster, Marguerite. “Did God Plan the Fall?” ChristianityToday.com, Christianity Today, 24 Sept. 2018

8 0
1 year ago
6. In 2008, the exchange rate between the US dollar and New Zealand dollar was NZ$1.71/$; in 2009, the exchange rate between the
Naddika [18.5K]

Answer:

No, a currency carry trade with positive profit can not be conducted.

Explanation:

The currency carry trade is the trading strategy where investor funding from lower-yield currency to invest in higher-yield currency with expectation to earn positive profit from the yield differences between the two currencies.

However, this strategy only works when the difference is big enough to compensate for the depreciation ( if any) of the higher-yield currency against the lower-yield currency.

With the given information, the strategy will not work because the depreciation of NZ$ against US$ after one-year is too big to be compensated for the yield difference.

For specific example, suppose the strategy is conducted, in 2008, an investor will borrow, for example, US$1 at 4.2%, exchange it to NZ$1.71. Then, invest NZ$1.71 at 9.1%.

In 2019, an investor will get NZ$1.86561 (1.71 x 1.091). The, he/she exchanges at the 2019 exchange rate, for US$1.36176 (1.86561 / 1.37). While at the same time, he will have to pay back 1 x 1.042 = US$1.042 => The loss making in US$ is US$0.32.

6 0
2 years ago
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