Joan and Valerie’s Art Gallery is losing business as the local people are all moving out...

Joan and Valerie’s Art Gallery is losing business as the local people are all moving out because the local town factory is closing. As a result, the company’s earnings and dividends are declining at a constant rate of 5% per year. The most recent dividend, paid yesterday, was $5 and investors require a rate of return of 15%

-What is the is the expected per share value of the stock today?

-If the current market price was $5 per share, would you buy it or short it?

-If the current market price was $15 per share, would you buy it or short it?

Expert Solution

Calc:

jeff jeffy answered 2 years ago

Business Law (20 marks) Thomas Crown sells a priceless Monet painting to the Prado Art Gallery...

Business Law Thomas Crown sells a priceless Monet painting to the Prado Art Gallery in Madrid. The gallery pays him a fortune for this masterpiece. A few months later, Monet’s great granddaughter produces a document proving without a doubt that she is the rightful owner of the artwork, and that it was stolen from her. She claims the painting back from the Prado Gallery. 1.1. Advise Prado Gallery on the relevant warranty that may assist them on a claim against...

Question 2 (20 marks) – ALL CALCULATIONS MUST BE SHOWN A local theme park is losing...

Question 2 – ALL CALCULATIONS MUST BE SHOWN A local theme park is losing money. The current price of admission is $60 per person with an average daily attendance of 750 people. You are an independent consultant employed to recommend a pricing strategy. The demand schedule estimated by the consultant is shown in the table below. Price Quantity of tickets sold per day Elasticity 0 1200 -- 20 1050 40 900 60 750 80 600 100 450 120 300 140...

Trends in Restaurant Take-Out A local restaurant does a pretty significant take-out business. According to the...

Trends in Restaurant Take-Out A local restaurant does a pretty significant take-out business. According to the first few years that the business was open, the following table gives the percentages of take-out orders happen each day of the week. Sunday Monday Tuesday Wednesday Thursday Friday Saturday 14% 9% 8% 11% 15% 21% 22% They recently noticed that they have been short drivers some days but have been not as busy other days. In a pool of 600 orders, this is...

In a survey, 668 out of 1112 people said they support Medicare for all. Find the...

In a survey, 668 out of 1112 people said they support Medicare for all. Find the rule of thumb 95% confidence interval estimate of the true proportion of supporters.

Business people point out that the documentation for capital budgeting proposals is often quite impressive. Cash...

Business people point out that the documentation for capital budgeting proposals is often quite impressive. Cash flows are projected down to the last thousand dollars (or even the last dollar) for each year (or even each month). Opportunity costs and side effects are handled quite properly. When a high net present value appears at the bottom, one’s temptation is to say yes immediately. Nevertheless, the projected cash flow often goes unmet in practice, and the firm ends up with a...

Adam Smith argued that all business is local. Explain what this means, including the evolution of...

Adam Smith argued that all business is local. Explain what this means, including the evolution of the concept.

Consider the statement: “It’s important in business today for all firms to work to cut out...

Consider the statement: “It’s important in business today for all firms to work to cut out the middlemen. Intermediaries represent costs that can be saved by finding ways to cut them out of the system. Down-channel buyers always benefit when this happens.” Do you agree with this statement? Why or why not? Discuss and be specific in arguing your points.

Question