Assume that the average firm in your company's industry is expected to grow at a constant rate of 5%, and its dividend yield is 4%
Your company is about as risky as the average firm in the industry, but it has just developed a line of innovative new products which leads to expect that its earnings and dividends will grow at a rate of 40% this year and 25% the following year, after which growth should match the 5% industry average rate. The last dividend paid was $2. What is the value per share of your firm's stock?
A) $42.60
B) $82.85
C) $91.88
D) $101.15
E) $110.37
B
You might also like to view...
Gains and losses on the redemption of bonds are reported as other income or other expense on the incomestatement
a. True b. False Indicate whether the statement is true or false
A company uses the weighted-average method for inventory costing. At the end of the period, 22,000 units were in the ending Work in Process inventory and are 100% complete for materials and 75% complete for conversion. The equivalent costs per unit are materials, $2.65 and conversion $5.35. Compute the cost that would be assigned to the ending Work in Process inventory for the period.
A. $176,000. B. $87,725. C. $132,000. D. $146,575. E. $93,775.
Attachment gives the creditor an enforceable security interest in the collateral.
Answer the following statement true (T) or false (F)
Product U23N has been considered a drag on profits at Jinkerson Corporation for some time and management is considering discontinuing the product altogether. Data from the company's budget for the upcoming year appear below:Sales$730,000Variable expenses$350,000Fixed manufacturing expenses$234,000Fixed selling and administrative expenses$161,000In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $144,000 of the fixed manufacturing expenses and $93,000 of the fixed selling and administrative expenses are avoidable if product U23N is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be:
A. ($15,000) B. $143,000 C. $15,000 D. ($143,000)