answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
balu736 [363]
2 years ago
13

The earnings and dividends of Nsuala Computer Co. are expected to grow at an annual rate of 15 percent over the next 4 years and

then slow to a constant growth rate of 8 percent per year. Nebula currently pays a dividend of $0.50 per share. What is the value of Nsuala stock to an investor who requires a 14 percent rate of return?
Business
1 answer:
Blizzard [7]2 years ago
5 0

Answer:

$11.36

Explanation:

Data provided in the question:

Annual growth rate for 4 years = 15% = 0.15

Growth rate after 4 years = 8% = 0.08

Current dividend paid, D0 = $0.50 per share

Required rate of return = 14% = 0.14

Now,

Dividend paid for the next year = Current dividend × ( 1 + growth rate )

Thus,

Do = $0.50

D1 = $0.50 × ( 1 + 0.15 ) = $0.575

D2 = $0.575 × ( 1 + 0.15 ) = $0.661

D3 = $0.661  × ( 1 + 0.15 ) = 0.7604

D4 = $0.7604  × ( 1 + 0.15 ) = $0.8745

D5 = $0.8745  × ( 1 + 0.08 )  = $0.9444

Therefore,

Current Price = [ ₀⁴∑ (Dividend ÷ (1 + r )ⁿ) ] + [ D5 ÷ ( r - g ) ] ÷ (1 + r)⁴

Here,

n is the year

r is the required rate of return

thus,

= $0.575 ÷ (1 + 0.14) + $0.661 ÷ (1.14)² + $0.7604 ÷ (1.14)³ +$0.8745 ÷ (1.14)⁴ + [ ($0.9444 ÷ (0.14 - 0.08)) ] ÷ 1.14⁴

= $11.36

You might be interested in
An international firm considering foreign expansion should take into account that: a) the timing and scale of entry of foreign e
Alchen [17]

Answer: c) if the firm's core competence is based on proprietary technology, entering a joint venture might risk losing control of that technology.

Explanation:

When firms expand into international markets, it is a standard practice to partner with a local company that already has expertise in the market to enable an easier transition.

This creates a problem however because in partnering with the company, the competitive advantage that the company holds could be at risk. This is even more so if the competitive advantage is based on proprietary technology and by entering into a partnership and giving another company access to that technology, there is a risk that control could be lost.

7 0
1 year ago
In the United States, many agricultural products (such as corn, wheat, and rice) are subsidized. What are the benefits of subsid
timofeeve [1]

Answer:

Correct answer:

b) lower prices for consumers and producers

Explanation:

In United States of America, food is one of the fundamental things which the government guarantee its citizens. Most agricultural products are subsidized by the government both for the farmers (producer) and the citizens (consumers).

<em>The subsidy for the producer could be inform of payment of incentive, giving out agricultural implements and grants. On the other-hand, the subsidy to the consumer could be inform of reduced price of the agricultural food crops.</em>

6 0
1 year ago
Resources are adequate, but demand varies widely over the life of the project. Delaying noncritical activities to lower peak dem
-BARSIC- [3]

Answer:

resource smoothing

Explanation:

According to the definition provided in the question we can say that this is regarding resource smoothing. Like mentioned in the question this term refers to a management technique that adjusts the resources so that the requirements do not surpass the resource limits that the company has specified, by delaying the noncritical activities in order to allow for the important ones first.

If you have any more questions feel free to ask away at Brainly.

3 0
2 years ago
Redo the company’s income statement at the 5,000-unit level of activity using the contribution format.
adell [148]
Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense. (Omit the "£" sign in your response.) 
<span>Shipping Expense: </span>
<span>(86,200 - 45,900) / (5,100 - 2,000) = £13 variable cost per unit </span>
<span>86,200 - (13 x 5,100) = £19,900 fixed cost </span>
<span>£ Y = £19,900 + £13 X </span>

<span>Salaries and Commissions </span>
<span>(238,400 - 114,400) / (5,100 - 2,000) = £40 variable cost per unit </span>
<span>238,400 - (40 x 5,100) = £34,400 fixed cost </span>
<span>£ Y = £34,400 + £40 X </span>

<span>3. </span>
<span>Redo the company’s income statement at the 5,100-unit level of activity using the contribution format. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "£" sign in your response.) </span>

<span>Frankel Ltd. </span>
<span>Income Statement </span>
<span>For the Month Ended June 30 </span>
<span>Sales revenue 912900 </span>
<span>Variable expenses: </span>
<span>Cost of goods sold 346800 </span>
<span>Shipping expenses 5,100 x 13 = 66,300 </span>
<span>Commissions 5,100 x 40 = 204,000 </span>

<span>Contribution margin 295,800 </span>

<span>Fixed expenses: </span>
<span>Fixed shipping 19,900 </span>
<span>Insurance expenses 9000 </span>
<span>Depreciation expenses 42700 </span>
<span>Sales salaries 34,400 </span>
<span>Advertising expenses 69200 </span>

<span>Net operating Income 120600</span>
7 0
1 year ago
A wireless store owner takes presale orders for a new smartphone and tablet. He gets 320 preorders for the smartphone and 310 or
Masja [62]

Answer:

y = $440

x = $ 580

Explanation:

Given data:

order for smartphone is 320

order doe tablet is 310

sale of all order is $322,000

total combined price for smartphone and tablet is $1020

let cost of one smartphone is x

let cost of one tablet is y

320 x +310 y = 322,000..... 1

x + y = 1020 .....2

solving 1 and 2 we get

y = $440

x = $ 580

5 0
1 year ago
Other questions:
  • A firm determines its profit by subtracting______ from _____ .
    10·2 answers
  • A teacher sets up a machine that beeps at random intervals; research has demonstrated that, if students check "yes" or "no" in a
    15·1 answer
  • Carrier Lennox Trane York Sales $ 150,000 $ 550,000 $ 38,700 $ 255,700 Sales discounts 5,000 17,500 600 4,800 Sales returns and
    13·1 answer
  • BigFive Inc. has been known for its excellent customer service since its start more than 40 years ago. The company carefully sel
    15·1 answer
  • You have the option to play tennis or a round of golf​ (but not​ both). The tennis match requires you to take 2 hours off from w
    8·1 answer
  • Slapshot Company makes ice hockey sticks. During the month of June, 1,900 sticks were completed at a cost of goods manufactured
    5·1 answer
  • Greene Corporation Balance Sheets At December 31
    10·1 answer
  • Bob got a 30 year Fully Amortizing FRM for $1,500,000 at 4%, except with non-constant payments. For the first 2 years Bob will p
    5·1 answer
  • Costco Wholesale Corp. has FCFE of $2.00 billion in the most recent year. The cash flows are expected to grow at the annual rate
    15·1 answer
  • Oddo's Pizza is a restaurant that recently implemented a new system to identify and gather information about its regular custome
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!