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timofeeve [1]
4 years ago
11

Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.00 next year. The growth rate in dividends for all thre

e companies is 6 percent. The required return for each company’s stock is 8 percent, 11 percent, and 14 percent, respectively. What is the stock price for each company?
Business
1 answer:
elena-14-01-66 [18.8K]4 years ago
7 0

Answer:

The the stock price for each company is:

Red = $150 per share

Yellow = $60 per share

Blue = $37.50 per share

Explanation:

as per the devidend growth model, the share price can be given by:

Po = D1/(ke-g)

Po is the share price today

ke is the required rate of return

g is the growth rate on devidend

Red = $3/(0.08 - 0.06)

        = $150 per share

Yellow = $3/(0.11 - 0.06)

            = $60 per share

Blue = $3/(0.14 - 0.06)

        = $37.50 per share

Therefore, The the stock price for each company is:

Red = $150 per share

Yellow = $60 per share

Blue = $37.50 per share

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Phantasy [73]

Answer:

$3,484.85

Explanation:

Calculation to determine tax-equivalent value

Using this formula

Tax-equivalent value=Nont-taxable amount/(1-Tax rate)

Let plug in the formula

Tax-equivalent value=$2,300/(1-.34)

Tax-equivalent value=$2,300/.66

Tax-equivalent value=$3,484.85

Therefore A nontaxable employee benefit with a value of $2,300 would have a tax-equivalent value of:$3,484.85

6 0
3 years ago
If The Wall Street Journal lists a stock's dividend as $1, then it is most likely the case that the stock: Multiple Choice pays
REY [17]

Answer:

paid $.25 per share per quarter for the past year

Explanation:

A stock is ownership rights purchased by investors in a public company. Holders of stock are called stockholders and they are regarded as owners of the company.

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If the stock's dividend is $1, it means it either paid $1 the past year or paid $.25 per share per quarter for the past year

8 0
3 years ago
What do individual shareholders gain when they buy shares of a companies stock?
baherus [9]
Share Ownership by Individuals.
Did you know owning shares means tax advantage. Your tax situation can benefit from using the tax advantage that come with fully franked dividends.owning shares also means you are a company owner. When you are buying shares you are buying the company`s asset and its profits. All that told there many advantages that come along with purchase of shares by an individual who wishes to invest his capital in shares.
Benefits of Owning Shares.

1. Stock Owners Take Advantage of a Growing Economy.
As the economy grows so do cooperates earning that is because economic growth creates income this will create a consumer demand that will automatically drive more revenue into companies register an lead to rise company`s share value.
2. Easy to Buy.
The stock market has made it easy to by shares from companies. They can be purchased through  a broker, financial planner or online. Once you have set up an account you can stock at any minute. The stock market runs 24 hours, five days a week making the market reliable and sufficient.
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Historically stocks have averaged an annual return of 10%. That is better than the annual inflation of 3.2%. It  means you have a longer time horizon. That way a stock owner is limited to the risks aligned with the stock market.
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Summery.
A well defined portfolio will provide most benefits and fewer risk arising to stock ownership. to exchange you shares at a limited risk and get to earn more experts advice apart from stock ownership alone have a mix of stock bonds and commodities. This has proven to be the best way to make highest returns at lower risk. It is important to note that shareholders in stock market contribute close to 80% of the revenue in the market.

 
6 0
3 years ago
A researcher was interested in the relationship between the number of texts sent in a day and the number of e-mails sent in a da
mixas84 [53]

Answer:

A. 14

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the researcher claims that the width of the interval would have been smaller if the sample had been different, and in this case different refers to larger. The original sample included only 15 people, so in order to increase the data sample, you must include more than 15 people. That is why 14 doesn't make sense.

3 0
3 years ago
3. (1 point) Suppose a firm faces potential demand from two customer bases, H and L, with high and low valuation of the firm’s p
MariettaO [177]

Answer: A. increases with the number of H consumers.

Explanation: If all type H customers are currently purchasing the product, it means that its customer base is large and significant enough and as such the firm would prefer to sell all of its product to H, and also do to the fact that there is only so much supply that a firm can provide. But, fewer quantities of goods would remain for L if more and more goods are sold to H. Due to this lower quantity supplied to the L customer base, it then means that the firm can set the price higher for L. This is because at a higher price, quantity demanded reduces (which is expected for L) and it can therefore maintain supply to H which has more customers.

7 0
4 years ago
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