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ANEK
27 days ago
13

Global Tek plans on increasing its annual dividend by 15 percent a year for the next four years and then decreasing the growth r

ate to 2.5 percent per year. The company just paid its annual dividend in the amount of $.20 per share. What is the current value of one share of this stock if the required rate of return is 17.4 percent?a. $1.82 b. $218 c. $2.03 d. $2.71 e. $3.05
Business
1 answer:
Free_Kalibri [3.1K]27 days ago
6 0

Answer:

A) $1.82

Explanation:

The dividends discount model calculates stock value based on dividends distributed and the required return rate:

current dividend $0.20 per share

dividends for year 1 = $0.23 per share

dividends for year 2 = $0.2645 per share

dividends for year 3 = $0.3042 per share

dividends for year 4 = $0.35 per share

After year 4, we compute the growing perpetuity as follows: dividend / (return rate - growth rate) = $0.35 / (17.4% - 2.5%) = $0.35 / 14.9% = $2.35

Next, we find the present value of the cash flows:

PV = $0.23/1.174 + $0.2645/1.174² + $0.3042/1.174³ + $0.35/1.174⁴ + $2.35/1.174⁵ = $0.1959 + $0.1919 + $0.188 + $0.1842 + $1.0537 = $1.82

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give at least 3 personal gains in your business (my gain,community gain and country gain) by considering the table below
Nady [2956]

Answer:

My Business - Fashion Design

My Benefits - Daily earnings, Job fulfillment, Enhancement of my business acumen.

Community Benefits - Availability of stylish attire, Skills training for young people seeking to learn.

National Benefits - Job creation for locals, Contribution to the nation's economy.

Explanation:

As a Fashion Designer, I thrive by generating income while pursuing my passion. The enterprise also enables me to refine my business abilities, such as using effective marketing strategies to expand my reach.

My community gains from my offerings, as they can customize their garments in any style they prefer. Young individuals and others aspiring to acquire skills can enroll at a reasonable cost.

The country I inhabit also reaps benefits from the financial success of my business, as it supports the national economy. Additionally, my business provides meaningful employment opportunities for citizens.

8 0
1 month ago
Which scenario describes the highest level of productivity? A. Producing $50 chairs using resources that cost $400 B. Producing
stepan [3001]

Answer:

C

Explanation:

This option yields the best value for the chairs when compared to other scenarios.

8 0
1 month ago
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Which of the following is a type of machine safeguarding?
Scilla [3267]
I believe the correct option is B.
4 0
1 month ago
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A movie theater substantially decreases the price of its soda during the same week that a heavily advertised new movie is being
Katen [2925]

Answer:

Both price and quantity rise

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The reduction in soda prices boosts soda demand. As moviegoers typically enjoy popcorn along with their drinks, this spike in soda demand can lead to increased demand for popcorn, thereby raising both its price and quantity.

5 0
1 month ago
An insurance firm agrees to pay you $3,310 at the end of 20 years if you pay premiums of $100 per year at the end of each year f
Mariulka [3182]

Answer:

6.43%

Explanation:

The insurance company will calculate the internal rate of return utilizing the method detailed below:

Cash flows      Year involved      Present [email protected]%  Present [email protected]%          

($100)                 1-20                      ($851)                            ($1,487.75)                      

$3,310                 20                        $492                             $1,832.67

                                                        ($359)                           $344.92

IRR=A%+ (a/a-b)*(B%-A%)

A%=10%  a= ($359) B%=3%  b=$344.92  

IRR=10%+(-$359/-$359-$344.92)*(3%-10%)

     =6.43%

3 0
1 month ago
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