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Lilit [14]
1 year ago
5

hudson corporation will pay a dividend of $2.80 per share next year. the company pledges to increase its dividend by 7.40 percen

t per year indefinitely. if you require a return of 15.40 percent on your investment, how much will you pay for the company's stock today? multiple choice $32.59 $33.60 $11.43 $35.00 $36.40
Business
1 answer:
trapecia [35]1 year ago
3 0

Option d. $35.00 is the share price that one should pay for the stock today to get the required return

The share price, or the price you will pay for the company's stock right now, can be calculated using the necessary rate of return calculation, the formula is as follows:

RRR=(EDP/SP)+DGW

where;

RRR=required rate of return

EDP=expected dividend payment from share

SP=share price

DGW=dividend growth rate

In our case:

RRR=15.40%=15.4/100=0.154

EDP=$2.80

SP=unknown

DGW=7.40%=7.40/100=0.074

Substituting the values in the formula we get the following:

0.154=(2.80/SP)+0.074

(0.154-0.074)=(2.80/SP)

0.08=2.80/SP

SP=2.80/0.08

So, the share price of the stock=$35

Learn more about dividends:

brainly.com/question/28044310

#SPJ4

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Explanation:

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If there are no excess reserves in the banking system and the Fed lowers the required reserve ratio, it follows that banks will
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Answer:

Excess reserves

Explanation:

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One of them is the use of reserve ratio.

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If there is no excess reserves and the Fed lowers required reserve ratio, it means banks will now have more money they can use to service customers.

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Answer:

$54,020

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4 0
3 years ago
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Solution :

Given :

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When making a payment of FUTA taxes, the employer must make the payment by the: a.10th of the month after the quarter. b.end of
Murljashka [212]

Answer:

Correct option is D.

<u>End of the month after the quarter.</u>

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