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Brrunno [24]
2 years ago
9

what+would+you+pay+today+for+a+stock+that+is+expected+to+make+a+$1.50+dividend+in+one+year+if+the+expected+dividend+growth+rate+

is+3%+and+you+require+a+16%+return+on+your+investment?
Business
1 answer:
Naya [18.7K]2 years ago
8 0

The price of any security is nothing but the PV of Cash flows that are discounted at the required rate of Ret(Ke )Price = D1 / [ Ke - g ] = $ 1.5 / [ 16 % - 3 % ] = $ 1.5 / [ 13 % ] = $ 11.54.So, the Price of Stock today is $ 11.54.

The dividend rate of growth is the annualized share rate of growth that a selected stock's dividend undergoes over an amount of time. several mature firms ask to extend the dividends paid to their investors on a daily basis. Knowing the dividend growth rate may be a key input for stock valuation models identified as dividend discount models.

Being ready to calculate the dividend growth rate is important for the victimization of the dividend discount model. The dividend discount model is a kind of security-pricing model. The dividend discount model assumes that the calculable future dividends–discounted by the surplus of internal growth over the company's estimated dividend growth rate–determine a given stock's price.

If the dividend discount model procedure ends up in the next variety than the current price of a company’s shares, the model considers the stock undervalued. Investors who use the dividend discount model believe that by estimating the expectation of money flow within the future, they'll realize the intrinsic value of a specific stock.

Learn more about  Price of Stock  here: brainly.com/question/25818989

#SPJ4

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The Dennis Company reported net income of $50,000 on sales of $300,000. The company has average total assets of $500,000 and ave
densk [106]

Answer:

C) 12.5%

Explanation:

The computation of the return on equity is shown below

Return on equity is

= net income ÷ equity

where,

equity is

= Total assets - total liabilities

= $500,000 - $100,000

= $400,000

Now the return on equity is

= $50,000 ÷ $400,000

= 12.50%

Hence, the return on equity is 12.50%

Therefore the corredct option is c.

7 0
3 years ago
Cost pressure from international competitors pushes companies toward greater scale and efficiency. But some products must also m
SSSSS [86.1K]

Answer:

Transnational strategy

Explanation:

There is a difference in global approach and Transnational approach.

In global approach, one product is sold and promoted the same way across all channels and location. While in the case of Transnational strategy, it is more like a customized or personalized approach to sell products to a particular targeted audience.

Hope this helps.

Good Luck.

8 0
3 years ago
PLEASE HELP ME ?????
marin [14]

I thought it was the principle but it is THE REGISTRAR

8 0
3 years ago
A bond had a price of $1,946.61 at the beginning of the year and a price of $1,982.79 at the end of the year. The bond's par val
julsineya [31]

Answer:

The percentage return on the bond is 8.02%

Explanation:

The return on the bond comprises of the increase or decrease in bond's price plus the coupon earned by investors on the bond in the year.

The difference in market price is considered that is the amount could be sold for in the market price at that point in time.

The return on the bond is computed thus:

closing price minus opening price ($1,982.79-$1,946.61)=$36.18

plus coupon received($2000*6%)                                    =$120

total return                                                                             $156.18

% return =total return/opening price

               =$156.18/$1946.61

                =8.02%

4 0
4 years ago
Read 2 more answers
Which is your least urgent concern if you are stranded in a remote area and must await rescue?
Karolina [17]
The least urgent concern if you are stranded in a remote area is that whether you have a shelter or a place that you could stay until the rescue arrives. It is because the most urgent concern that you have to deal with or prioritize first is your food and the materials you need to survive.
3 0
3 years ago
Read 2 more answers
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