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Author Question: The next dividend payment (one year from now) by Bacon Signs Inc, will be 2.50 per share. The ... (Read 40 times)

c0205847

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on: Jul 11, 2018
The next dividend payment (one year from now) by Bacon Signs Inc, will be 2.50 per share. The dividends are anticipated to maintain a 2 growth rate, forever.
 
  If the required rate of return for Bacon Signs Inc is 11, WHAT IS THE CURRENT PRICE PER SHARE:
  A) 27.78.
  B) 28.33.
  C) 19.23.
  D) 19.62.

Question 2

ERISA requires that the vested portion of your benefits at your death must
 
  A)
 
  be forfeited.
  B)
 
  be applied to the benefits of the surviving employees in the pension plan.
  C)
 
  be used to provide death benefits for your surviving spouse.
  D)
 
  be paid to the Pension Benefit Guaranty Corporation.


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irishcancer18

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Reply #1 on: Jul 11, 2018
Answer to Question 1

A
Explanation: A) PV = (Div one)/(r-g) = 2.50/(.11-.02 ) = 27.78.

Answer to Question 2

C


c0205847

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Reply 2 on: Jul 11, 2018
Great answer, keep it coming :)

laurnthompson

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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