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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.

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Harrison and Sherrie are making decisions on their bank accounts. Harrison wants to put more money in as a principle amount beca
Troyanec [42]
Sherrie wants to put the original money in an account with a higher interest rate. Explain which method will result in more money.

Answer: In this case I would say that both Sherrie and Harrison are good methods that will result in more money. As to find out which idea would make the most bang for the buck we would need actual data like interest rates.

I hope it helps, Regards.
5 0
3 years ago
Read 2 more answers
Which wholesaler's channel function is demonstrated when a buyer receives quicker delivery because wholesalers are located close
Bess [88]

Answer:

E. transportation

Explanation:

The wholesaler is one of the middle-men in the channel of distribution that stands between the producer and the retailer in bulk breaking, he buys in bulk from the producers and sell to the retailer.

One of the functions of the wholesaler in the distribution value chain is the transportation of goods from manufacturer's warehouse to his warehouse at his own cost, thereby bringing the products closer to the consumers.

 

4 0
3 years ago
Assuming that the federal reserve banks sell $40 million in government securities to commercial banks and the reserve ratio is 2
sdas [7]

The reserve requirement when the federal reserve banks sell $40 million in government securities to commercial banks is $8 million.

<h3>How to calculate the reserve requirement?</h3>

From the information given, the the federal reserve banks sell $40 million in government securities to commercial banks and the reserve ratio is 20 percent.

Therefore, the reserve requirement will be:

= 20% × $40 million

= $8 million.

Learn more about reserve requirements on:

brainly.com/question/25812353

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8 0
1 year ago
Adams Industries holds 42,000 shares of FedEx common stock, which is not a large enough ownership interest to allow Adams to exe
olga2289 [7]

Answer:

investment in FedEx = 4410000

Unrealized holding gain = 420000

Explanation:

given data

FedEx common stock = 42,000 shares

market value = $95

market value = $105

to find out

what amount will it be reported in the 2019 balance sheet

solution

we know that It is coming under available for sale security since the shares hold is less than majority of outstanding shares

and here

investment in FedEx =42,000  × 105

investment in FedEx = 4410000

and

Unrealized holding gain is = ( 105 - 95 ) × 42000

Unrealized holding gain = 420000

5 0
3 years ago
"The Federal Reserve raises the reserve requirement from 7 percent to 8 percent. Consequently banks must set aside more money an
joja [24]

Answer: a. Inflation

Explanation:

Inflation refers to the general rise in prices of items in an economy in a certain period of time. Inflation essentially erodes the value of the domestic currency of the economy in question.

Central Banks like the Fed can use Monetary policy to influence inflation. In this case they reduced the amount of money in the economy by reducing bank loans. This will ensure that people cannot spend too much which would increase demand and therefore increase prices.

By doing this, they have limited the likelihood of inflation.

6 0
3 years ago
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