1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
nasty-shy [4]
3 years ago
11

How much are you willing to pay for one share of stock if the company just paid an annual dividend of $1.03, the dividends incre

ase by 3 percent annually, and you require a rate of return of 15 percent?
a.8.69%
b.8.54%
c.9.04%
d.9.22%
e.9.45%
Business
1 answer:
anastassius [24]3 years ago
3 0

Answer:

b.8.54%

Explanation:

Use Dividend Growth model to calculate the rate

Dividend =D1 = $1.03

Rate of return = k = 15%

Growth rate = g = 3%

Formula

Cost of Capital = D1 / k-g

Cost of Capital = 1.03 / 15%-3%

Cost of Capital = 1.03 / 12%

Cost of Capital = 8.58%

The closest answer is 8.54%, as no option matches with the answer.

You might be interested in
The price of a European call option on a non-dividend-paying stock with a strike price of $50 is $6. The stock price is $51, the
klemol [59]

Answer: 2.09

Explanation:

Given the following ;

Strike price (K) = $50

Price (c) = $6

Rate (r) = 6% = 0.06

Stock price (So) = $51

Time (T) = 1

Recall, relation for a put-call parity(p) is given by:

p + So = c + Ke^-(rT)

p = c + [Ke^-(rT)] - So

p = 6 + [50e^-(0.06 × 1)] - 51

p = 6 + [50×e^-0.06] - 51

p = 6 + (50 × 0.9417645) - 51

p = 6 + 47.0882267 - 51

p = 53.0882267 - 51

p = 2.0882267

p = 2.09

4 0
3 years ago
A severe freeze has damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of
EastWind [94]

Group of answer choices.

A. the supply curve, resulting in a lower equilibrium price.

B. the supply curve, resulting in a higher equilibrium price.

C. the demand curve, as consumers try to economize because of the shortage.

D. the demand curve, resulting in a price ceiling in the market.

Answer:

B. the supply curve, resulting in a higher equilibrium price.

Explanation:

In this scenario, a severe freeze has damaged the Florida orange crop. Thus, the impact on the market for orange juice will be a leftward shift of the supply curve, resulting in a higher equilibrium price.

An equilibrium price can be defined as the price at which the quantity of goods demanded is equal to the quantity of goods supplied.

Additionally, the equilibrium price is generally said to be stable because at this price, the quantity of goods or services demanded is equal to the quantity of goods or services supplied to the consumers.

7 0
3 years ago
All else being equal, decreasing sample size will
Tom [10]

Answer:

multiply by 3

Explanation:

it doesn't make sense at first but when you add it all up you get a solid3.1 but you round it to the nearest 10th and get 3

7 0
2 years ago
After you send in your FAFSA form, what will you receive back
goldenfox [79]
<span>After you submit the Free Application for Federal Student Aid (FAFSA), you will be sent a Student Aid Report (SAR). If they have a valid e-mail address on file for you, they will send you an e-mail, within 3 to 5 days, with instructions on how to access an online copy of your SAR.</span>
8 0
3 years ago
Wendy is a college student in her sophomore year. she is single with no kids, has vegetation paid for by scholarship. what type
AlekseyPX

Answer:

none of the above

Explanation:

6 0
3 years ago
Read 2 more answers
Other questions:
  • The Sherman Antitrust Act Group of answer choices was passed to encourage judicial leniency in the review of cooperative agreeme
    11·1 answer
  • Sam Seller was worried that Barney would not perform under the contract and demanded an assurance. How many days does Barney hav
    6·1 answer
  • Raw Materials Inventory Begin. Inv. 12,400 Purchases 47,000 Avail. for use 59,400 DM used 50,000 End. Inv. 9,400 Work in Process
    5·1 answer
  • One of two methods must be used to produce expansion anchors. Method A costs $80,000 initially and will have a $15,000 salvage v
    14·1 answer
  • As a CEO, you are concerned that your firm and the industry in your country are being devastated by foreign imports. Trade lawye
    12·1 answer
  • Your campus computer store reported Sales Revenue of $175,000. The company's gross profit percentage was 65 percent. What amount
    15·1 answer
  • The Chewbacca Starship Company had the following transactions during the month of December:
    7·1 answer
  • Because of an accident Royce was involved in, his insurance company has increased his annual premium for auto insurance by 5. 2%
    10·1 answer
  • A career path that involves horizontal movement within or across organizations is referred to as a(n) _____.
    15·1 answer
  • Improperly capitalizing a repair and maintenance expense item as fixed asset will result in:____.
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!