The Goliath Inc. decides to pay the following dividends over the next three years: $2, $2.6, and $3.38. Thereafter, the company will maintain a constant 10% growth rate in dividends forever. The required return of Goliath’s stock is 15%. Suppose Victor has $1000 today. He decides to buy 10 shares of Goliath’s stock today and save the rest of his $1000 into the Whales Cargo bank, which provides an annual interest rate of 6%. Victor will sell his shares of Goliath’s stock in year 3 and withdraw the money from the bank as well. Victor wants to know how much money he can have in year 3, with such an investment plan. a. What is the stock price of Goliath Inc. today?b. How much money can Victor save in the bank today?c. What is the stock price (per share) of Goliath Inc. when Victor sells it in year 3 (immediately after the third dividend is paid out)?d. How much money can Victor withdraw from the bank in year 3?e. With such an investment plan, how much money will Victor have in year 3? Suppose Victor consumes all his dividends over these years and his wealth consists of the capital gains from the stock and the money withdrawal from the bank.

On july 1, 2016, killearn company acquired 103,000 of the outstanding shares of shaun company for $21 per share. this acquisition gave killearn a 40 percent ownership of shaun and allowed killearn to significantly influence the investee's decisions. as of july 1, 2016, the investee had assets with a book value of $6 million and liabilities of $1,468,500. at the time, shaun held equipment appraised at $140,000 above book value; it was considered to have a seven-year remaining life with no salvage value. shaun also held a copyright with a five-year remaining life on its books that was undervalued by $562,500. any remaining excess cost was attributable to goodwill. depreciation and amortization are computed using the straight-line method. killearn applies the equity method for its investment in shaun. shaun's policy is to declare and pay a $1 per share cash dividend every april 1 and october 1. shaun's income, earned evenly throughout each year, was $580,000 in 2016, $606,600 in 2017, and $649,200 in 2018. in addition, killearn sold inventory costing $93,000 to shaun for $155,000 during 2017. shaun resold $97,500 of this inventory during 2017 and the remaining $57,500 during 2018.a. determine the equity income to be recognized by killearn during each of these years. 2016 2017 2018b. compute killearn’s investment in shaun company’s balance as of december 31, 2018.

Determine if the following statements are true or false. an increase in government spending can crowd out private investment. an improvement in the budget balance increases the demand for financial capital. an increase in private consumption may crowd out private investment. lower interest rates can lead to private investment being crowded out. a trade balance in sur+ increases the supply of financial capital. if private savings is equal to private investment, then there is neither a budget sur+ nor a budget deficit.

Although appealing to more refined tastes, art as a collectible has not always performed so profitably. during 2003, an auction house sold a sculpture at auction for a price of $10,211,500. unfortunately for the previous owner, he had purchased it in 2000 at a price of $12,177,500. what was his annual rate of return on this sculpture? (a negative answer should be indicated by a minus sign. do not round intermediate calculations and enter your answer as