This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Crosby Inc. has an 11 required rate of return. It does not expect to initiate dividends for 20 ... (Read 63 times)

saraeharris

  • Hero Member
  • *****
  • Posts: 546
on: Jul 10, 2018
Crosby Inc. has an 11 required rate of return. It does not expect to initiate dividends for 20 years, at which time it will pay 4.00 per share in dividends. At that time, Crosby expects its dividends to grow at 6 forever.
 
  What is an estimate of Crosby's price in 20 years (P20) if its dividend at the end of year 20 is 4.00?
  A) 34.80
  B) 55.00
  C) 57.50
  D) 84.80

Question 2

You just took out a 12,000 loan for your small business. The loan has a four year term and repayment is in the form of four equal end-of-year payments. The interest rate on the loan is 11.5.
 
  What is your total interest expense in the first year of the loan?
  A) 1,380.00
  B) 1,089.13
  C) 764.81
  D) 403.20
  E) 2,529.29


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

katara

  • Sr. Member
  • ****
  • Posts: 305
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: D
Explanation: D) We use the formula: P20 = . Inserting our values, we get:
P20 = = = 84.80.

Answer to Question 2

A


saraeharris

  • Member
  • Posts: 546
Reply 2 on: Jul 10, 2018
YES! Correct, THANKS for helping me on my review

lcapri7

  • Member
  • Posts: 350
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Many of the drugs used by neuroscientists are derived from toxic plants and venomous animals (such as snakes, spiders, snails, and puffer fish).

Did you know?

Signs of depression include feeling sad most of the time for 2 weeks or longer; loss of interest in things normally enjoyed; lack of energy; sleep and appetite disturbances; weight changes; feelings of hopelessness, helplessness, or worthlessness; an inability to make decisions; and thoughts of death and suicide.

Did you know?

In inpatient settings, adverse drug events account for an estimated one in three of all hospital adverse events. They affect approximately 2 million hospital stays every year, and prolong hospital stays by between one and five days.

Did you know?

Green tea is able to stop the scent of garlic or onion from causing bad breath.

Did you know?

Less than one of every three adults with high LDL cholesterol has the condition under control. Only 48.1% with the condition are being treated for it.

Hormonal regulation of digestion rate in the stomach and small intestine. Hormonal regulation of digestion rate in the stomach and small intestine.
Lymphatic vessels (green) pick up excess tissue fluid, purify it in lymph nodes, and return it to th Lymphatic vessels (green) pick up excess tissue fluid, purify it in lymph nodes, and return it to th
Situations Causing Changes in Respiratory Rate Situations Causing Changes in Respiratory Rate
Population growth rate % Population growth rate %
Outgroup role in relative rate test Outgroup role in relative rate test
Twenty percent of the automobiles inspected at a state inspection station required repairs to ... Twenty percent of the automobiles inspected at a state inspection station required repairs to ...
Video: Chemical Changes

For a complete list of videos, visit our video library