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Sholpan [36]
2 years ago
9

Microsoft presently pays no dividend. You anticipate Microsoft will pay an annual dividend of $0.60 per share two years from tod

ay and you expect dividends to grow by 4% per year thereafter. IF Microsoft's equity cost of capital is 12%, then the value of a share of Microosfoft today is:
(A) $6.70
(B) $6.90
(C) $5.00
(D) $6.25
Business
1 answer:
Setler [38]2 years ago
4 0

Answer:

(A) $6.70

Explanation:

Find dividends per year;

D1=0

D2=0.60

D3=D2(1+g); 0.60(1+0.04) = 0.624

discount rate = 12%

Next, find the PV of each dividend at t=0;

PV of D2 = 0.60 / (1.12) = 0.5357

PV of D3 onwards = \frac{0.624 / (0.12-0.04)}{1.12^{2} }

PV of D3 = 7.8 / (1.12^2) = 6.2181

Then sum up these PVs to find the current value of stock;

Value = 0.5357 + 6.2181

Value = 6.7538

The closest value would be A.) 6.70

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Free_Kalibri [48]

Answer and explanation:

We should consider that at the same time as the hurricane, U.S. consumers were cutting back on sugar foods. It implies that the quantity demanded for sugar foods was likely to decrease bringing the prices up. However, the hurricane affecting the sugarcane crops affects the supply which will be lower. Thus, definitely, if the quantity supplied is lower so will the price.

4 0
2 years ago
Presented here is basic financial information (in millions) from the annual reports of Nike and Adidas.
Zinaida [17]

Answer and Explanation:

Nike

$18,627÷ ($2,494.7a+ $2,795.3b)/2

$18,627÷$2,645 = 7.0 times

Adidas

$10,299÷$1,415c+ $1,459d)/2

10,299÷$1 437= 7.2 times

2,566.2 – 71.5

b2,873.7 – 78.4

c1,527 – 112

d1,570 – 111

Average collection period

Nike

365÷7.0= 52.1 days

Adidas

365÷7.2

= 50.7 days

Therefore Adidas's accounts receivable turnover was about 3% higher [(7.2 – 7.0) ÷7.0] than that of Nike's, which simply means that Adidas was slightly more efficient than Nike in turning accounts receivable into cash.

8 0
2 years ago
Blogging for Business Many businesses find blogging a valuable tool for communicating with employees, customers, and the larger
Margaret [11]

Answer:

Recruiting

Internal communication

Online community building

Explanation:

Blogs allow businesses to interact with customers and employees and to keep them informed.

Blogs can potentially reach far-flung and vast audiences.

Companies use blogs for public relations, customer relations, crisis communication, market research, viral marketing, online communities, internal communication, and recruiting.

3 0
2 years ago
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If Joe to Go decides that a joint venture has too much risk and franchising does not provide enough financial payoff, what strat
Temka [501]

<u>Answer:</u>

<em>It chooses (D) Direct investment exporting  strategy</em>

<em></em>

<u>Explanation:</u>

Countries in a few decades have made significant forward jumps towards a comprehensive domain, which has contributed incredibly to making worldwide business dealings free from restrictions. In the overall marvel of Globalization, outside direct speculation (FDI) is quickly turning into a significant factor in the commercial development of firms and nations.

For any firm to create and develop it needs to extend its exercises all around, and to accomplish that target; there are diverse market section modes accessible to the firm going from FDI.

5 0
2 years ago
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Which of the following are money market instruments? Check all that apply. Common stocks Treasury bills Certificates of deposit
Fittoniya [83]

Answer: No one of the options but <u>Commercial paper</u>

Explanation:  Commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts payable and inventories and meeting short-term liabilities. Maturities on commercial paper rarely range longer than 270 days.

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