Business, 23.11.2020 22:30 emarquez05

Universal Laser just paid a dividend of $3.40 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 13 percent for the first three years, a return of 11 percent for the next three years, and then a return of 9 percent thereafter. What is the current share price for the stock?

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Answer from: Dogtes9667

Total Value of stock today = $76.76

Explanation:

B G Dividend Cf P NF Discounting factor NF*Df

1 5.00% 3.570 3.57000 0.884956 3.15929

2 5.00% 3.7485 3.74850 0.783147 2.93563

3 5.00% 3.935925 3.93593 0.693050 2.72779

4 5.00% 4.13272125 4.13272 0.624370 2.58035

5 5.00% 4.33935731 4.33936 0.562495 2.44087

6 5.00% 4.55632518 119.60 124.15986 0.506752 62.91830

Total Value of stock today = $76.76

Workings

Price of stock* at end of year 6 = Dividend in year 6 x (1+Growth rate) / (Required rate-Growth rate)

Price of stock* at end of year 6 = 4.55632518 x (1+5%) / (9%-5%)

Price of stock* at end of year 6 = 119.603536

b = Year , g = Growth, dcf = Dividend Cash flow, p = Price of stock* , Nf = Net cash inflow , Discounting factor = Df, Present value = Nf*Df

Answer from: Quest

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.

Answer from: Quest

2b2t

explanation:

2b2t

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