Davenport Corporation's last dividend was $2.70, and the directors expect to maintain the historic 3% annual rate of growth. You plan to purchase the stock today because you feel that the growth rate will increase to 5% for the next three years and the stock will then reach $25 per share.1. How much should you be willing to pay for the stock if you require a 17% return? 2. How much should you be willing to pay for the stock if yo feel that the 5% growth rate can be maintained indefinitely and you require a 17% return?

Answers

Answer 1

Answer:

A) $22.16 per share

B) $23.625

Explanation:

Price to be paid for the stock today is equal to the present value of expected inflows  we can find price by multiplying the dividend with the growth rate then dividing it by the required rate of return.

Price = Dividend(1+growth rate) / 1+ required return

Data

Dividend = 2.7

Required return = 17%

Growth rate = 5%

1)           year1       year2       year3       year3  

Price = [tex]\frac{2.7(1.05)}{(1.17)} +\frac{2.7(1.05)^2}{(1.17)^2}+\frac{2.7(1.05)^3}{(1.17)^3}+\frac{25}{(1.17)^3}[/tex]

Price =  $22.16 per share

2)

Price to be paid =  [tex]\frac{2.7(1.05)}{0.17-0.05}[/tex]

Price to be paid = $23.625


Related Questions

In a team, constructive criticism should focus on what particular team members are doing wrong and how those mistakes hurt the team as a whole .True or false

Answers

Answer:

False

Explanation:

Constructive criticism should not only focus on what people are doing wrong, that is just to criticize someone, there is nothing constructive about that. Constructive criticism is about letting other team members know what they are doing well, and what they are doing not so well (or simply wrong), but it should also include how they can use their abilities and capabilities to correct their mistakes.

Forms of business organizations
Businesses can be classified into the following forms: sole proprietorship, partnership, corporation, limited liability company (LLC), and limited liability partnership (LLP)
Different forms of businesses have different characteristics. Which of the following characteristics would apply to a limited liability company and a limited liability partnership?
A. LLPs are not suitable for professional firms such as accounting, law, and architecture.
B. Owned by single individual.
C. Owners have limited liability and right to vote.
D. Have corporate ownership structure.
E. Taxed as a partnership.
F. Limited financial liability
You come across different kinds of businesses every day. The following table describes some businesses. Using the description of each business, classify it as a sole proprietorship, a partnership, a corporation, or a limited liability company/limited liability partnership.
Business Scenario Type of Business
Selena and Mario run a law firm in Chicago. LLC/LLP
The firm has debt of $100,000, but Selena
and Mario will not be held personally liable for
the law firm's debt.
Chris, the CEo of a beverage company, is Sole Proprietorship
required to certity the accuracy of information Corporation Partnership
provided in the company's quarterly reports LLC/LLP
Brandon started a business, based in a different
state, with his uncle. Due to the business's under-
performance, they had to close the business.
Brandon, however, ended up losing his house due
to a litigation claim.
Richard founded and operated a wedding planning
agency, which specialized in celebrity weddings.
When he died, his business was dissolved because
there was no plan for control after his death.

Answers

Answer:

Forms of business organizations

1. Characteristics that would apply to a limited liability company and a limited liability partnership:

F. Limited financial liability

2. Business Scenario and Type of Business

a. Selena and Mario run a law firm in Chicago. LLC/LLP .  The firm has debt of $100,000, but Selena  and Mario will not be held personally liable for  the law firm's debt.  Limited Liability Partnership

b. Chris, the CEo of a beverage company, is Sole Proprietorship

required to certify the accuracy of information Corporation Partnership

provided in the company's quarterly reports LLC/LLP

c. Brandon started a business, based in a different  state, with his uncle. Due to the business's under- performance, they had to close the business.  Brandon, however, ended up losing his house due  to a litigation claim. Partnership

d. Richard founded and operated a wedding planning  agency, which specialized in celebrity weddings.  When he died, his business was dissolved because  there was no plan for control after his death. Sole Proprietorship

Explanation:

A sole proprietorship is owned by one person without the advantage of being registered as a company (LLC). A partnership is a business organization owned by more than one person without the advantage of limited liability of the partners or being registered as a company (LLC).  A corporation is an incorporated business organization with limited liability for the shareholders.  Limited liability company (LLC) is a corporation that is owned by individuals with the advantage of limited liability.  A limited liability partnership (LLP) is a partnership or business organization owned by more than one person which enjoys limited liability.

As of December 31, Year 2, Moss Company had total cash of $195,000, notes payable of $90,500, and common stock of $84,500. During Year 3, Moss earned $42,000 of cash revenue, paid $24,000 for cash expenses, and paid a $3,000 cash dividend to the stockholders.
Determine the amount of retained earnings as of December 31, Year 2.

Answers

Answer:

$20,000

Explanation:

Calculation for the amount of retained earnings as of December 31, Year 2.

Using this formula

Retained earnings=Total cash -Notes payable-common stock

Where,

Total cash= $195,000

Notes payable= $90,500

Common stock= $84,500

Let plug in the formula

Retained earnings = $195,000 − $90,500 − $84,500

Retained earnings= $20,000

Therefore the amount of retained earnings as of December 31, Year 2 will be $20,000

Now you must decide who should be on the team. Kelly will be on the team as a matter of course, and you must choose three other GearUp employees to work with her.

Answers

Answer: The best choices would have been Deepak Menon, Ruby Coulbury, and Ethan Atkinson

Explanation:

Team work requires the best of those not only coming to the team with their talent and idea but those who'd be willing to put their everything to make sure the project being carried out is a success, failure to do so would just be having bunch of talented people with no passion but woould rather work for personal gain and fame. Choosing the best shouldn't just be what they can do but also how passionate are they. That's why the best choices would have been Deepak Menon, Ruby Coulbury, and Ethan Atkinson based on their passion accompanied with their talent.

According to Gerzema Where are some of the changes that consumers or making when it comes to spending money or buying an item what has caused these changes to take place

Answers

Answer: The answer is given below

Explanation:

According to Gerzema, some of the changes that consumers are making when it comes to spending money or buying an item include the idea of using debit cards at the expense of credit cards. This implies that individuals are now paying for goods and services with the money that is already with them.

He also said individuals now go after the “liquid life”, where he said that individuals define success on liquidity and not on having things. He also said individuals look at organization's values and that they're always looking for ways to have value for things they buy. The cause of these are the fact that consumers are being empowered and also wants to improve their economy.

Frederick Taylor believed that more efficient workers should be paid higher wages than their lower-performing coworkers, a system referred to as the _______ system.

Answers

Answer:

Referred to as the Differential rate system

Pizza Hut has Bread Sticks 6 for $2.50 and 1-topping pizzas at $12.99. How much is 24 breadsticks and 2-one topping pizzas with tax of 7%?

Answers

Answer:

Bread sticks: 6 × $2.50 = $15

Pizza: $12.99

$15 + $12.99 = $27.99

Tax: 7% = 0.07

$27.99 × 0.07 = $1.96 (approximate)

$27.99 - $1.96 = $26.03

hope this helped you!

If you were to purchase an October option with an exercise price of 50 for $8 and simultaneously sell an October option with an exercise price of 60 for $2, you would be

Answers

Answer: bullish and conservative

Explanation:

If you were to purchase an October option with an exercise price of 50 for $8 and simultaneously sell an October option with an exercise price of 60 for $2, you would be bullish and conservative.

It should be noted that the exercise price is simply referred to as the price per share that a traded option owner is entitled to either purchase or sell an underlying security. Since the owner of the option decided simultaneously sell an October option with an exercise price of 60 for $2, he or she is bullish and conservative.

Gems Corp. is a leading jewelry brand that finds it hard to make as much profit as its competitors. In order to overcome this, the employees of Gems Corp. decide to work harder to provide unique value to customers and increase the sales of the company. After a year, it is able to make more profits than its competitors. This scenario best illustrates ________.

Answers

Answer:

competitive advantage

Explanation:

The competitive advantage of a company is what differentiates a company from other companies and attracts customers to the firm.

The competitive advantage of Gems Corp. is to provide unique value to customers

A registered representative of a FINRA member firm is going to present a seminar on retirement planning. It will be a slide show, and no specific advice will be given. The expected attendance is approximately 50 people. Under the FINRA rule on communications with the public,
A) this is a public appearance and no approvals are necessary.
B) this seminar can take place only if the recommendations are tailored to the specific needs of the audience.
C) a registered principal is required to attend to ensure that the standards of ethical conduct are maintained.
D) the slides are considered a retail communication and need principal approval before first use.

Answers

Answer:

A) this is a public appearance and no approvals are necessary.

Explanation:

In this scenario, a registered representative of a FINRA member firm is going to present a seminar on retirement planning with an expected attendance of approximately 50 people. It will be a slide show, and no specific advice will be given.

Under the FINRA rule on communications with the public, this is a public appearance and no approvals are necessary.

According to FINRA, a public appearance can be defined as an unscripted, spontaneous live presentation to a group of people comprising of potential investors. A public appearance do not require a principal approval and are not bonded by the FINRA rules and regulations.

Additionally, FINRA is an acronym for Financial Industry Regulatory Authority. It is a non-profit agency in the United States of America, which is saddled with the responsibility of handling the licensing and regulation of broker-dealers in securities.

According to FINRA a registered principal is required to attend to ensure that the standards of ethical conduct are maintained.

According to the rule 2210 of FINRA it is required that every communication has to be done fairly and also in good faith.

FINRA is a regulatory organization that ensures that all investors and firms are able to participate well in the market and also have confidence in their dealings by protecting integrity.

Read more on https://brainly.com/question/13678897?referrer=searchResults

Click or tap Quizmo, the InQuizitive alien, in the upper left-hand corner. See what happens, and complete the following sentence. Clicking or tapping Quizmo takes you to the "Take a ________" screen.

Answers

Answer:

test

Explanation:

The given quiz has displayed the picture of a African tiger. The test requires to identify the animal with the given picture. The African tiger are slightly different from the other tigers. They have unique facial cuts and their constant anger is known for their nature.

A partnership in which partners share in gains or losses, and carry unlimited liability for all partnership debts, is called a

Answers

Answer:

General partnership

Explanation:

A general partnership is a business that is formed and/or owned by 2 or more individuals and who agree to share in profits, assets, liabilities, etc.

As seen from the question also, the general partnership entails sharing in losses and gain as well as carrying unlimited liability.

Cheers.  

For each example, identify the most appropriate CTSO. 1. Ann wants to be a manager who directs the work of others: 2.Teresa wants to have a career that emphasizes mathematics: 3.Justin wants to have a career in nursing: 4.Howard wants to have a career focused on the education of

Answers

Answer:

Ann: DECA

Teresa: TSA

Justin: HOSA

Howard: FEA

Explanation:

Answer: DECA your welome if i did spell it wrong sorry bout that im am a horrible speller

Advantages of flow production

Answers

Answer:

Flow production is capital intensive. This means it uses a high proportion of machinery in relation to workers, as is the case on an assembly line. The advantage of this is that a high number of products can roll off assembly lines at very low cost.

Explanation:

XYZ Escrow has gone out of business. They committed one of THE violations of all violations of escrow holder regulations. What is the violation?

Answers

Answer:

B. XYZ Escrow did not maintain the records and files of its clients. Due to poor record keeping, several accounts at XYZ were overdrawn.

Explanation:

An Escrow business is one in which an individual enters into a contract with another person whereby he is expected to hold a valuable material such as money, the documents of a real estate property, jewelry, etc., until an agreed event occurs. In running this business, it is very important that a written contract is signed by both parties, and that accurate records of materials that are deposited and their owners are maintained.

Failure to do that would result in the closure of the business as in the case of XYZ Escrow. This is because the organization would be unable to account for the valuables and money deposited, and so, Escrow accounts can be overdrawn.

Advantages of flow production

Answers

Answer:

Advantages of flow production

Flow production is capital intensive. This means it uses a high proportion of machinery in relation to workers, as is the case on an assembly line. The advantage of this is that a high number of products can roll off assembly lines at very low cost.

Jason is the new manager of a local retail store. He is in charge of all the activities that take place at the store. During the first two weeks after joining, Jason carefully monitors each employee's tasks and the time spent on performing each of those tasks. He then organizes the tasks and activities into work groups, standardizes the procedures involved, and allocates a time limit for each work group and procedure. Jason informs his employees that their wage incentives will directly reflect their adherence to the new standards. In this case, Jason's actions are consistent with the ideologies of _____.

Answers

Answer:

scientific management

Explanation:

Scientific management is a method that aims to increase economic efficiency of workflows particularly labour productivity.

It breaks job to be done into parts and makes sure each one is executed as systematically as possible thereby increasing standardisation and producing better results.

In this scenario Jason carefully monitors each employee's tasks and the time spent on performing each of those tasks. He then organizes the tasks and activities into work groups, standardizes the procedures involved, and allocates a time limit for each work group and procedure.

This is employing scientific management to improve on performance of labour

A stock market is a public market for trading a company's stocks and derivatives. The bid-ask spread in a dealer market represents the profit that a dealer would make on a transaction involving a security. Which of the following statements best describes the bid-ask spread? The difference between the closing price of the security and the opening price of the security on the day of the transaction. The difference between the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it. The sum of the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it. Erik, a trader, wants to buy 1,000 shares of XYZ stock, while a second trader, Alison, is willing to sell 1,500 shares of the same stock. Unfortunately, Erik and Alison don't know one another and must complete their transactions using the stock exchange's market-making dealer. XYZ's market maker is willing to sell her shares for $30.65 per share and purchase additional shares for $30.25 per share. Select the most appropriate values in the following table: Term Bid price Ask price Bid-ask spread Value $30.25 $30.65 $0.40 If the market maker is willing to purchase the entire block of 1,500 shares from Alison and, from that block, resell 1,000 shares to Erik, then the market maker's net profit from Erik's transaction-excluding any inventory effects-will be_______.

Answers

Answer: The difference between the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it.

Net profit = $400

Explanation:

The bid ask spread is the difference between the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it.

From the question, we have been given the following information:

Bid price = $30.25

Ask price = $30.65

Bisk ask spread = Ask price - Bud price

= $30.65 - $30.25

= $0.40

Net profit = $0.40 × 1000

= $400

Mr. Morgan earns $38,000 a year as a salesperson and a 5% commission on all his sales. He has a mortgage of $910 a
month and pays $175 a month for utilities. Mr. Morgan owns a rental property for which he receives $680 per month.
Which is a liability?

the yearly salary
the commission
the mortgage
the rental property

Answers

Answer:

C: the mortgage

Explanation:

The monthly mortgage of $910 would be considered a liability for Mr. Morgan as it is a kind of loan taken by Mr. Morgan and the rest of the given amounts are considered as revenues.

What is the balance sheet?

The balance sheet is an accounting statement that records the assets and liabilities & equity at the closing of an accounting year. The liabilities and equity is recorded as the first head whereas the second head are the assets.

According to the data provided, the mortgage of $910 is treated as a liability for Mr. Morgan. He records the mortgage as a non-current liability because it is a type of long-term loan taken by him which has to be paid back after a period of one year. The yearly salary of $38,000, sales commission of 5%, and the rental income of $680 are considered to be the revenues for Mr. Morgan.

Therefore, the mortgage of $910 would be the only liability for Mr. Morgan.

Learn more about the liability in the related link:

https://brainly.com/question/15006644

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What is a market economy regulated by?

Answers

Answer:

Producers and consumers :)

Explanation:

Market economies are run by buyers and sellers, there is no government involved.

A company can raise money by doing all but which of the following?
A. Conducting an initial public offering
O B. Taking a loan
C. Providing stock options to executives
D. Issuing bonds

Answers

Your awnser is B because if you take a loan you have to pay it back which means you didn’t earn anything more than what you already had

Answer:

B

Explanation:

Jason's manager was making him work overtime and refusing to pay him for the extra hours he was putting in. Jason approached the director of the company and explained his situation to him. The director took appropriate action against jason's manager, reduced jason's work hours, and paid him for the extra time he had earlier put in. Based on the given information, jason's company is most likely a _____. Bureaucratic organization flat organization monarchy patriarchy

Answers

Answer:

bureaucratic organization

Explanation:

Bureaucratic organisations are highly organised businesses that have a pyramid organisation structure.

Every employee knows their place and decisions are made through an organised process.

Since bureaucratic organisations are organised there is a pay structure that is not changeable for each employee and provisions for overtime payment.

In this scenario Jason's manager made him work overtime without paying him. This is in violation of the organisational structure of a bureaucratic structure.

So when the manager for the complaint Jason was paid for the extra time he put in. He also reduced the work hours of Jason to the acceptable one for the company

An evaluation technique for technology that requires analyzing benefits and risks, understanding the trade-offs, and then determining the best action to take in order to ensure that the desired positive outcomes outweigh the negative consequences.
Techniques used to analyze accomplishments against specific goals and criteria. Examples of assessments include tests, surveys, observations, and self-assessment.

Answers

Answer:

assessments

Explanation:

Assessment refers to the technique that is used to make the interference for the students so that they can learned and developed. It includes various things like designing, collecting, analyzing, interpreting, etc

Now for the technology, the evaluation technique is required so that the benefits and risk can be analyzed also the best action to be carried out for coming up with the positive results

So the given situation represents the assessments

A new per unit subsidy for hybrid car production increases the supply of hybrid cars. If hybrid cars are elastically demanded, what will happen to total revenues from hybrid car production?

Answers

Answer:

A) They will rise.

Explanation:

In case when the demand for hybrid cars are in elastic so here the total revenue should be rises as due to the subsidy, the price would decline and the supply rises this results there is a rise in demand that shows elastic so the demand rise at high percentage as compared to decline percentage with respect to the level of price

Due to this, the revenue would increase

Hence, the correct option is A.

In the communications​ model, a(n)​ _________________ will try to capture the​ customer's attention. A. executive team

Answers

Answer:

sender will be the answer not that much to say but I am astonished they they give you a question like this my school was harder and i finished business too

a loan secured in order to buy a property

Answers

Answer:

Explanation:

With a secured loan, you give lenders an ownership interest in some of your property. The property guaranteeing the loan is the collateral, and lenders can take it if you don't pay as promised. ... You can also get a secured personal loan that can be used for almost any purpose

Buying a house is most likely a long-term goal for a person of which of these ages? O A. 15 years old OB. 65 years old O C. 55 years old O D. 75 years old​

Answers

Answer:

A

Explanation:

Answer:

A: 15 years old

Explanation:

A firm has a current price of $40 a share, an expected growth rate of 11 percent and expected dividend per share (D1) of $2. Given its risk, you have a required rate of return for it of 12%. Your expected rate of return and investment decision is as follows:a. 10% - do not buy.b. 12% - do not buy.c. 14% - buy.d. 16% - buy.e. 18% - buy.

Answers

Answer:

d. 16% - buy

Explanation:

R = (D1 / P0) + g

Where, R=Expected Return, P0 = Current Market Price = $40, D1=Expected Dividend=$, g = Expected Growth Rate = 11% = 0.11

Expected Return = R = ($2/$40) + 11%

R = 0.05 + 0.11

R = 0.16

R = 16%

Expected Return is higher than the required return of 12%.  Hence, it should be bought (it is expected to give higher return than required)

Question in picture

Answers

Answer is 4 Explantion:

Precision Aviation had a profit margin of 7.00%, a total assets turnover of 1.4, and an equity multiplier of 1.8. What was the firm's ROE?

Answers

Answer:

17.64%

Explanation:

Precision aviation has a profit margin of 7%

The total assets turnover is 1.4

The equity multiplier is 1.8

Therefore the ROE can be calculated as follows

= Total assets turnover × equity multiplier × profit margin

= 1.4 × 1.8 × 7

= 17.64%

Hence the ROE is 17.64%

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