Business, 09.04.2020 05:14 luiscastaenda

Magnetic Corporation expects dividends to grow at a rate of 14.7% for the next two years. After two years dividends are expected to grow at a constant rate of 3.8%, indefinitely. Magnetic’s required rate of return is 14.6% and they paid a $1.43 dividend today. What is the value of Magnetic Corporation’s common stock per share? (Show your answers to the nearest cent)

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Answer from: 1846252

The value of the stock today is $16.63.

Explanation:

The value of the common stock today can be calculated using the DDM approach. As the dividends are growing at a certain rate for some period of time before the growth rate becomes constant, the two stage growth model will be used. Th formula for value/price under two stage dividend growth model is,

P0 or V0 = D1 / (1+r) + D2/(1+r)^2 + ... + [Dn * (1+g) / (r - g)] / (1+r)^n

Thus, V0 = 1.43 * (1+0.147) / (1+0.146) + 1.43 * (1+0.147)^2 / (1+0.146)^2 + [{1.43 * (1+0.147)^2 * (1+0.038)} / (0.146 - 0.038)] / (1+0.146)^2

V0 = $16.63

Answer from: Quest

explanation:

c because the item on a bank statement is also referred to as an account statement. in addition, it provides the beginning balance, ending balance, statement date, transaction date for each transaction, payee, customer name and address, statement period, the account holder's account number, and the bank's customer service number

Answer from: Quest

1 all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

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