It is 2023, and Black Friday Inc. has successfully been growing its sales over the last...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
It is 2023, and Black Friday Inc. has successfully been growing its sales over the last 3 years: from just $200 million in 2020 to an expected $230 million for 2023. Consequently, the company's dividend, which had been fixed at $0.25 for the foreseeable future back in 2020, grew by 5% from 2020 to 2021 and by another 10% from 2021 to 2022. For 2023 and onward, dividend growth will likely settle to an impressive 7% per year. The risk in Black Friday's stock warrants a discount rate of 10%, the same that applied in the past. a) What were/will be the dividends paid from 2021 to 2024 ? b) What was the company's cumulative average annual stock price growth between 2020 and this year (2023) ? -note that back in 2020, investors pricing the stock were not yet aware of the dividend increases ahead- c) Calculate the expected realized rate of return of an investor that bought the stock right after the 2020 dividend payment and now plans to sell it in two years, without ever having reinvested any of the dividends received. It is 2023, and Black Friday Inc. has successfully been growing its sales over the last 3 years: from just $200 million in 2020 to an expected $230 million for 2023. Consequently, the company's dividend, which had been fixed at $0.25 for the foreseeable future back in 2020, grew by 5% from 2020 to 2021 and by another 10% from 2021 to 2022. For 2023 and onward, dividend growth will likely settle to an impressive 7% per year. The risk in Black Friday's stock warrants a discount rate of 10%, the same that applied in the past. a) What were/will be the dividends paid from 2021 to 2024 ? b) What was the company's cumulative average annual stock price growth between 2020 and this year (2023) ? -note that back in 2020, investors pricing the stock were not yet aware of the dividend increases ahead- c) Calculate the expected realized rate of return of an investor that bought the stock right after the 2020 dividend payment and now plans to sell it in two years, without ever having reinvested any of the dividends received. It is 2023, and Black Friday Inc. has successfully been growing its sales over the last 3 years: from just $200 million in 2020 to an expected $230 million for 2023. Consequently, the company's dividend, which had been fixed at $0.25 for the foreseeable future back in 2020, grew by 5% from 2020 to 2021 and by another 10% from 2021 to 2022. For 2023 and onward, dividend growth will likely settle to an impressive 7% per year. The risk in Black Friday's stock warrants a discount rate of 10%, the same that applied in the past. a) What were/will be the dividends paid from 2021 to 2024 ? b) What was the company's cumulative average annual stock price growth between 2020 and this year (2023) ? -note that back in 2020, investors pricing the stock were not yet aware of the dividend increases ahead- c) Calculate the expected realized rate of return of an investor that bought the stock right after the 2020 dividend payment and now plans to sell it in two years, without ever having reinvested any of the dividends received. It is 2023, and Black Friday Inc. has successfully been growing its sales over the last 3 years: from just $200 million in 2020 to an expected $230 million for 2023. Consequently, the company's dividend, which had been fixed at $0.25 for the foreseeable future back in 2020, grew by 5% from 2020 to 2021 and by another 10% from 2021 to 2022. For 2023 and onward, dividend growth will likely settle to an impressive 7% per year. The risk in Black Friday's stock warrants a discount rate of 10%, the same that applied in the past. a) What were/will be the dividends paid from 2021 to 2024 ? b) What was the company's cumulative average annual stock price growth between 2020 and this year (2023) ? -note that back in 2020, investors pricing the stock were not yet aware of the dividend increases ahead- c) Calculate the expected realized rate of return of an investor that bought the stock right after the 2020 dividend payment and now plans to sell it in two years, without ever having reinvested any of the dividends received.
Expert Answer:
Answer rating: 100% (QA)
a The dividends paid from 2021 to 2024 are 2021 025 unchanged from 2020 2022 0275 5 increase from 20... View the full answer
Related Book For
Auditing And Assurance Services An Integrated Approach
ISBN: 9780137879199
18th Edition
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Posted Date:
Students also viewed these finance questions
-
Hillside Memorial Hospital has approximately 100 providers on staff, both hospital-employed and independently employed. One of Hillside's hospital-employed groups is Hillside General Surgery, a...
-
Ques 1: What is the major complaint by firms concerning the Sarbanes-Oxley act of 2012? A. the legislative maximum allowable compensation for a CEO. B. the legal requirement to disclose project...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
The programming language is Java and all of the Classes I was given are in bold. ALIEN CLASS import imagePackage.RasterImage; import java.awt.BasicStroke; import java.awt.Color; import...
-
Suppose that the strength of the electric field about an isolated point charge has a certain value at a distance of 1 m. How will the electric field strength compare at a distance of 2 m from the...
-
What is a liquidity substitute? When should it be used?
-
What is critical natural capital? Provide examples. For a company, who determines whether natural capital is a critical ecological resource? Is there a difference between other natural capital and...
-
Evan Nathan runs a home repair business. Recently he gathered the following cost information about the repair of a clients pool deck: replacement wood, $650; deck screws and supplies, $112; and...
-
PROBLEM THREE $400,000 4% bonds are issued at 97.67708575 for $390,708.34 when the market rate for similar bonds is 5%. Regular interest payments are June 30th and December 31st each year. Complete...
-
Obtain the general solution of the following differential equations: (a) (D 2D + 5)y = 0 (b) (D6 + 9D* + 24D + 16)y = 0
-
Discuss how class consciousness can explain wage polarization and current market distresses.?
-
What is total net operating capital? Why is it important for managers to calculate a companys capital requirements?
-
Indicate whether each of the following statements is true or false by writing T or F i n t he a nswer c olumn. There are numerous state, but no federal, regulations covering the misuse of computers...
-
What are income bonds and indexed bonds?
-
Lone Star Industries has just issued 160,000 of perpetual 10 per cent debt and used the proceeds to repurchase equity. The company expects to generate 75,000 of earnings before interest and taxes in...
-
Indicate whether each of the following statements is true or false by writing T or F i n t he a nswer c olumn. Employees who transfer money from their employers account into their own account without...
-
The Katash Company is a leader in the poultry market. It produces, sells and markets fresh and ice packed commodity chicken and frozen products known for their value and healthful qualities. Katash's...
-
If a force of F = 50 Ib is applied to the pads at A and C, determine the smallest dimension d required for equilibrium if the spring has an unstretched length of 1 ft. B 1 ft 1 ft F k = 15016/fr 1ft...
-
The field work for the June 30, 2023, audit of Tracy Brewing Company was finished August 19, 2023, and the completed financial statements, accompanied by the signed audit reports, were filed...
-
On February 17, 2024, a CPA completed all the evidence gathering procedures on the audit of the financial statements for the Buckheizer Technology Corporation for the year ended December 31, 2023....
-
Distinguish the three types of service organization reports.
-
Fill in the Blank. In the finite element method, \(a(n)\) ___________ solution is assumed within each element.
-
The stiffness matrix of a bar element is given by a. \(\frac{E A}{l}\left[\begin{array}{ll}1 & 1 \\ 1 & 1\end{array} ight]\) b. \(\frac{E A}{l}\left[\begin{array}{rr}1 & -1 \\ -1 & 1\end{array}...
-
What is the basis for the derivation of transformation matrices?
Study smarter with the SolutionInn App