The solution to the question is 10.
Answer:
P14 = $55.69545045394 rounded to $55.70
Explanation:
The dividend discount model (DDM) based on constant growth can help determine the current stock price. It assesses a stock’s price using the present value of the anticipated future dividends. The formula for determining today's price with a constant growth DDM is,
P0 = D1 / (r - g)
Where,
- D1 represents the expected dividend for Year 1 or the following year
- g denotes the constant growth rate for dividends
- r signifies the discount rate or the required rate of return
To find the stock price today, we will utilize the dividend expected in Year 1. Consequently, to compute the stock price 14 years into the future, we calculate D15. D15 can be figured out as follows,
D15 = D1 * (1+g)^14
D15 = 0.50 * (1+0.09)^14
D15 = $1.67086351362 rounded to $1.67
Now applying the DDM formula for the price,
P14 = 1.67086351362 / (0.12 - 0.09)
P14 = $55.69545045394 rounded to $55.70
Answer:
0.00573
Explanation:
Today's bond cost is $99.43
The bond's value at the year's end is $100
The difference calculates to: $100 - $99.43 = $0.57
This amount of $0.57 indicates the bond's yield. Therefore, the yearly yield is computed as $0.57/$99.43 = 0.00573
This yield represents the one-year discount rate applicable for a future value of $100, where its present value is $99.43.
Final Answer
0.00573
Sidewinder, Inc., has sales of $634,000, costs of $328,000, depreciation expense of $73,000, interest expense of $38,000, and a
arsen [3236]
Answer:
$154,050
Explanation:
The following shows how net income for the business is calculated:
Total Sales $634,000
Subtract: costs -$328,000
Subtract: depreciation -$73,000
EBIT -$233,000
Subtract: interest -$38,000
EBT 195,000
Subtract: tax(195,000 × 21%) -$40,950
Net income $154,050
The calculation involves deducting all costs, interest, and taxes from the total sales revenue to arrive at the net income.
