This topic contains a solution. Click here to go to the answer

Author Question: Crosby Inc. has an 11 required rate of return. It does not expect to initiate dividends for 20 ... (Read 86 times)

saraeharris

  • Hero Member
  • *****
  • Posts: 546
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
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
Wow, this really help


amandanbreshears

  • Member
  • Posts: 320
Reply 3 on: Yesterday
Excellent

 

Did you know?

Approximately 15–25% of recognized pregnancies end in miscarriage. However, many miscarriages often occur before a woman even knows she is pregnant.

Did you know?

The immune system needs 9.5 hours of sleep in total darkness to recharge completely.

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates's recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

Did you know?

More than 30% of American adults, and about 12% of children utilize health care approaches that were developed outside of conventional medicine.

Did you know?

Many medications that are used to treat infertility are injected subcutaneously. This is easy to do using the anterior abdomen as the site of injection but avoiding the area directly around the belly button.

For a complete list of videos, visit our video library