Two years ago, the initial public offering for a share of Wayne Industries common stock was P75.00. Last year, an investor computed a rate of return of 15% after receiving dividends of P6.OO per share. Assuming a constant growth rate, determine the dividends to be paid this year. (Ans. P6.42/shar
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Two years ago, the initial public offering for a share of Wayne Industries common stock was P75.00. Last year, an investor computed a
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- A firm that manufactures freezer for delivery vans currently has excess capacity. The firm expects that it will exhaust its excess capacity in three years. At that time it will have to invest P2,500,000 to build new capacity. Suppose that the firm can accept additional work as a subcontractor for another company. By doing so, the firm will receive a net cash inflow of P150,000 immediately and in each of the next three years. However, the firm will have to begin expansion two years earlier than originally planned to bring new capacity on line. Assume a discount rate of 12%. a. What is the NPV if the firm accepts the subcontractor job? b. What is the minimum amount that should be received from the subcontractor job for the company to accept it?Smith, a U.S. citizen, has been working as an executive of a telecommunication company in U.S., and her annual salary in 2021 was US$220,000. Her salary was expected to remain unchanged if she continued to work in the company. At the end of the year 2021, however, she was recruited by a media company in Brazil, so she started working in Brazil from January 2022, making an annual salary of US$280,000. Assuming that the amount of her salary equals the amount of her contribution to the production in the company she works for, how much the annual U.S. GDP and GNP in 2022 was changed due to her job relocation?Recently, an Internet service provider (ISP) in the United Kingdom implemented a “no-strings U.S.-style flat-rate plan” whereby its commercial subscribers can send and receive unlimited volume (measured in gigabytes) up to a cap of 10,000 gigabytes (per month) via their broadband Internet service for a flat monthly fee of £399.99. Under the old “metered plan,” Alistair Willoughby Cook sent and received a grand total of 3,500 gigabytes over his broadband connection and paid £399.99 in usage fees in a typical 30-day month. If all customers are exactly like Alistair, what is the impact of the flatrate plan on consumer welfare and the company’s profits? Explain.
- A student plans to deposit P1,500 in the bank now and another P3,000 for the next two years. If he plans to withdraw P5,000 three years from after his last deposit for the purpose of buying shoes, what will be the amount of money left in the bank after one year of his withdrawal? The effective annual rate of interest is 10%.The chairman of Heller Industries told a meeting of financial analysts that he expects the firm’s earnings and dividends to double over the next three years. The firm's current (that is, as of year 0) earnings and dividends per share are $3 and $1.5, respectively.(1) Estimate the compound annual dividend growth rate over the 3-year period.(2) Forecast Heller’s earnings and dividends per share for each of the next three years, assuming that they grow at the rate determined in Part (1).(3) Assuming that earnings and dividends per share of Heller Industries common stock grow at the rate determined in Part (1) for the next three years and then at 5 percent thereafter, what’s the price of that sock? (The investors’ required rate of return is 13%)What do you mean by internal rate of return (IRR)? Find the IRR of an investment having initial cash outflow of $213,000. The cash inflows during the first, second, third and fourth years are expected to be $65,200, $96,000, $73,100 and $55,400 respectively.
- In 2017, Burger King successfully acquired Popeye for $1.8 billion. If income from product sales is $1billion per year and net profit is 25% of sales, determine the rate of return the company will make over a 15-year period?A multinational engineering consulting firm that wants to provide resort accommodations to special clients is considering the purchase of a three-bedroom lodge in upper Montana that will cost $295,000. The property in that area is rapidly appreciating in value because people anxious to get away from urban developments are bidding up the prices. If the company spends an average of $775 per month for utilities and the investment increases at a rate of 0.75% per month, how long would it be before the company could sell the property for $100,000 more than it has invested in it? The time it will take is ____________months.Because of peso devaluation, a car costing P175,000 is to be purchased through a finance company instead of paying cash. If the buyer is required to pay P40,000 as down payment and P4,320 each month for four years, what is the effective interest rate in the diminishing balance?
- On July 1, 2012, Ms. C will need Php1, 000. Assume that the annual effective interest rate equals 0.0625. How much would Ms. C have to deposit on October 1, 2008 in order to be able to withdraw the Php1, 000 from the account on July 1, 2012?A small business purchased now for P50,000 will lose P9,600 each year for the first four years. An additional investment of P30,000 in the business wil required at the end of the fifth year. After 15 years the business can be sold for P70,000. What should be the profit each year from the sixth through the fifteenth year to obtain a rate of return of 25%?The Titanic Shipbuilding Company has a noncancelable contract to build a small cargo vessel. Construction involves a cash outlay of $265,000 at the end of each of the next two years. At the end of the third year, the company will receive payment of $625,000. The company can speed up construction by working an extra shift. In this case, there will be a cash outlay of $575,000 at the end of the first year followed by a cash payment of $625,000 at the end of the second year. Use the IRR rule to show the (approximate) range of opportunity costs of capital at which the company should work the extra shift Please answer fast I give you upvote