Question

the common stock of salazar insurance pays a constant annual dividend of $4.80 per share. what is one share of this stock worth at a discount rate of 13.3 percent?

Answer 1

Market Price =$36.09,is one share of this stock worth at a discount rate of 13.3 percent.

Common stock: What does that mean?

A security that symbolizes ownership in a firm is called common stock. Common stock owners choose the executive board and cast ballots for corporate rules. This kind of stock ownership frequently offers better long-term rates of return. Common stock is not subject to either assets or liabilities.

How are shares & common stock different from one another?

Definition: The term "stock" refers to the holder's interest in one or more businesses. A single share of interest in a firm is referred to as a "share" in contrast. For instance, if X has stock investments, X may have a collection of shares from various companies.

Briefing:

Market price = dividends per share

P0 = $4.80/.133

P0 = $36.09

Market Price =$36.09

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