The Ackert Company\'s last dividend was $1.55. The dividend growth rate is expec
ID: 2697459 • Letter: T
Question
The Ackert Company's last dividend was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (rs) is 12.0%. What is the best estimate of the current stock price? PLS SHOW THE SOLUTION AND EXPLAIN PLEASE
The ABC Corporation's budgeted monthly sales are $4,000. In
the first month, 40% of its customers pay and take the 3% discount.
The remaining 60% pay in the month following the sale and don't
receive a discount.
ABC's bad debts are very small and are excluded from this analysis.
Purchases for next month's sales are constant each month at $2,000.
Other payments for wages, rent, and taxes are constant at $500 per
month.
Construct a single month's cash budget with the information given.
What is the average cash gain or (loss) during a typical month for the
ABC Corporation? PLS SHOW THE SOLUTION AND EXPLAIN PLEASE
Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm's additional funds needed (AFN). The firm is operating at full capacity. Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm's investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions.
Last year's sales = S0 $300.0 Last year's accounts payable $50.0
Sales growth rate = g 40% Last year's notes payable $15.0
Last year's total assets = A0* $500.0 Last year's accruals $20.0
Last year's profit margin = PM 20.0% Initial payout ratio 10.0%
PLS SHOW THE SOLUTION AND EXPLAIN PLEASE
Explanation / Answer
current stock -price = (1.55*1.015/1.12)+(1.55*1.015*1.015/1.12^2)+(1.55*1.015*1.015*1.08/((.12-.08)*(1.12^2)))
current price = $37.04
2)sale = 4000
receipt = 4000*.4*.97+4000*.6 = 1552+4000*.6 = 3952
purchase = 2000
expense = 500
avg Sale = 4000*.4*.97+4000*.6= $3952
cost = 2000+500 = 2500
profit = 3952-2500 = $1452
3)
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