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dimaraw [331]
11 months ago
12

eastern hotel corp. pays a constant $7.80 dividend on its stock. the company will maintain this dividend for the next 13 years a

nd will then cease paying dividends forever. if the required return on this stock is 11.2%, what is the current share price?
Business
1 answer:
Lesechka [4]11 months ago
6 0

The stock is now trading at $52.16 per share.

The current value of an annuity of n regular payments of P at r% with yearly payments is provided by:

PV = P × (1 -((1 + r) ^{-n}÷r))

Estes Park Corp. distributes a fixed rate of a dividend of P = $7.80 per share on its shares. The corporation will retain this dividend for the following n = 13 years before ceasing dividend payments permanently. If the necessary returns on this stock are not metis r = 11.2% = 0.112.

The actual share price is calculated as follows:

Current share price = $7.80 × (1 -((1 + 0.112) ^{-13}÷0.112))

$7.80 × ((1 - 0.251) ÷ 0.112)

$52.16

Therefore, the current share price is $52.16

Read more about the stock price at

brainly.com/question/15327515?referrer=searchResults

#SPJ4

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Answer:

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Answer:

1. Tastes and Preferences of the Consumers

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3. Changes in Prices of the Related Goods

4. Advertisement Expenditure

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3 years ago
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Answer:

Unit cost= $5,5unit

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<u>In this exercise:</u>

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