What is the largest type of financial institution ?

Investors require a return of 13 percent on the stock for the first three years, a return of 11 percent for the next three years

lianna [129]

Complete Question:

BenchMark, Inc., just paid a dividend of $3.45 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 13 percent on the stock for the first three years, a return of 11 percent for the next three years, and then a return of 9 percent thereafter. What is the current share price for the stock.

Answer:

BenchMark, Inc.

The current share price for the stock is:

$43.13

Explanation:

a) Data and Calculations:

Dividend per share = $3.45

Growth rate = 5%

Investors' required rate of return = 13%

Stock value = Dividend per share / (Required Rate of Return – Dividend Growth Rate)

= $3.45/(0.13 - 0.05)

= $43.13

b) We can calculate BenchMark's current share price, by dividing the dividend per share by the investors' required rate of return after subtracting the growth rate from the required rate of return.

8 0

3 years ago

Which of the following is the most important factor in successful new-product introduction? Group of answer choices The new pro

exis [7]

Answer:

The correct answer is letter "B": The new product should deliver a meaningful and perceivable benefit to a sizable number of people.

Explanation:

A new product is a good or service that is going to be introduced to the market to satisfy the need for a specific sector. <em>For the new product to be successful, the need that it satisfies should represent a benefit for the target audience great enough to make them pay for it</em>. Besides, the new good or service must bring a differential feature to consider it more attractive compared to competitors or similar products that might already exist.

6 0

3 years ago

Read 2 more answers

Information technology can be used to support _______________. product development teams customer support processes any other bu

Nadusha1986 [10]

Information technology can be used to support - D. all the choices are correct. All of these choices can benefit from information technology, whether those are product development teams, customer support processes, or any other business activities. Information technology nowadays is a must-have, because basically everything today is done using computers or the Internet, which is why all employees should be technologically-literate.

6 0

2 years ago

Ian loaned his friend $30,000 to start a new business. He considers this loan to be an investment, and therefore requires his fr

xenn [34]

Answer:

Payment = Pmt(8%, 4, -30000) = $9,057.62

Interest Paid = Beginning amount * 8%

Principal paid = Payment - Interest Paid

End Balance = Beg Amount - Payment

Payment Beg Amount Payment Interest paid Principal paid End Balance

1 30,000 $9,057.62 2,400 6,657.64 23,342.38

2 23,342.38 $9,057.62 1,867.39 7,190.23 16,152.14

3 16,152.14 $9,057.62 1,292.12 7,765.45 8,386.69

4 8,366.39 $9,057.62 670.94 8,386.69 -

7 0

2 years ago

Clabber Company has bonds outstanding with a par value of $119,000 and a carrying value of $108,700. If the company calls these

Vladimir79 [104]

Answer:

option (b) $4,200 gain

Explanation:

Data provided in the question:

Par value of outstanding bonds = $119,000

Carrying value of the bonds = $108,700

Price at which bond is called = $104,500

Now,

Gain on the retirement is calculated using the relation as;

Gain on retirement

= Carrying value of Bonds - Price at which bond is called

= $108,700 - $104,500

= $4,200

Since, the result is positive, therefore a gain will be recognized

Hence, correct answer is option (b) $4,200 gain

6 0

3 years ago