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Savatey [412]
1 year ago
12

A stock is expected to maintain a constant dividend growth rate of 4.3 percent indefinitely. if the stock has a dividend yield o

f 5.6 percent, what is the required return on the stock?
Business
1 answer:
Thepotemich [5.8K]1 year ago
7 0

The required return on the stock is 9.9%.

Stock:

  • A stock, also known as equity, is a security that represents the ownership of a fraction of the issuing corporation. Units of stock are called "shares" which entitles the owner to a proportion of the corporation's assets and profits equal to how much stock they own.
  • Stocks represent ownership in a publicly traded company. You take a stake in a firm when you purchase its shares. For example, if a company has 100,000 shares, and you buy 1,000 of them, you own 1% of the company.
  • Stocks are not actual assets; they are financial assets. Paper assets that are easily convertible to cash are referred to as financial assets. Real assets have inherent worth because they are tangible.
  • The required return on the stock=dividend yield + Growth rate
  • which is equal to' =(4.3+5.6)
  • =9.9%

Learn more about Stock here brainly.com/question/1193187

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Fischer Company has outstanding 8,000 shares of $100 par value, 5% preferred stock, and 50,000 shares of $1 par value common sto
nikklg [1K]

Answer:

The appropriate solution is "$130,000".

Explanation:

The given values are:

No. of common shares outstanding

= 50,000

Dividend per share

= $1.80

No. of preferred shares outstanding

= 8,000

Dividend per share

= $5

Now,

The total dividend on common shares will be:

=  No. \ of \ common \ shared \ outstanding\times Dividend \ per \ share

On substituting the values, we get

=  50,000\times  1.80

=  90,000 ($)

The total dividend on preferred stock will be:

=  No. \  of \ preferred \ shares \ outstanding\times Divided \ per \ share

On substituting the values, we get

=  8,000\times 5

=  40,000 ($)

Hence,

The total dividend paid by company will be:

=  Total \ dividend \ on \ common \ shares +Total \ dividend  \ on \  preferred \ stock

=  90,000+40,000

=  130,000 ($)

Thus the above is the correct answer.

4 0
2 years ago
SHAPE magazine is targeted at young women seeking healthier lifestyles. At a price of $3 per copy, 1.25 million copies are sold.
Lerok [7]

Answer:

A. $ 3,750,000

Explanation:

Given that

At lower price

A copy is $3

Copies sold = 1.25 million

Recall that

Total revenue = Price of good × quantity of goods sold.

That is, the total amount of money a seller obtains by selling goods or/and services to a buyer(s)

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Total revenue at low cost

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= 3.75 million

= $3,750,000

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3 years ago
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