Answer:
First Expected Dividend will come in at the end of Year 3 or t=3 assuming current time is t=0.
D3 = $ 4.25, Growth Rate for year 4 and year 5 = 22.1 %
Therefore, D4 = D3 x 1.221 = 4.25 x 1.221 = $ 5.18925 and D5 = D4 x 1.221 = 5.18925 x 1.221 = $ 6.33607
Growth Rate post Year 5 = 4.08 %
D6 = D5 x 1.0408 = 6.33607 x 1.0408 = $ 6.59459
Required Return = 13.6 %
Therefore, Current Stock Price = Present Value of Expected Dividends = [6.59459 / (0.136-0.0408)] x [1/(1.136)^(5)] + 4.25 / (1.136)^(3) + 5.18925 / (1.136)^(4) + 6.33607 / (1.136)^(5) = $ 45.979 ~ $ 45.98
Price at the end of Year 2 = P2 = Present Value of Expected Dividends at the end of year 2 = [6.59459 / (0.136-0.0408)] x [1/(1.136)^(3)] + 4.25 / (1.136) + 5.18925 / (1.136)^(2) + 6.33607 / (1.136)^(3) = $ 59.3358 ~ $ 59.34
Dividend Yield at the end of year 3 = DY3 = D3 / P2 = 4.25 / 59.34 = 0.07612 or 7.612 %
Total Required Return = 14. 6 %
Therefore, Required Capital Gains Yield = 14.6 % - 7.612 % = 6.988 %
Answer:
B
Explanation:
Insider trading when you trade with non public information (you are an insider) and it can be illegal.
Wiki
Insider trading is the trading of a public company's stock or other securities based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information is illegal. This is because it is seen as unfair to other investors who do not have access to the information, as the investor with insider information could potentially make larger profits than a typical investor could make.
Answer:
Amount of the company's total capital stock at December 31, 2019:
Common stock = 8,000 x $15 = $120,000
Preferred stock = 2,000 x $30 = <u>$60,000</u>
Total issued share capital $180,000
Add: Net income at 31 December, 2019 <u>$375,000</u>
Total capital stock <u>$ 555,000</u>
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Explanation:
Total capital stock is the aggregate of par value of common stock, par value of preferred stock and net income.
Answer: Follow up with a letter that documents the call and promotes goodwill.
Explanation: The given case, belongs to the public relations concept under which the company tries to interact better with their customers, so that the customers enjoy a healthy experience and the image of the company remains positive.
The proper way to address a complaint call is to follow up by giving a letter stating the explanation apologies, excuses shall not be mentioned and assurance should be provided that such action would not be taken in future.
Answer:
<em>Monetary policy</em> consists of management of money supply and interest rates, aimed at achieving macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity.
