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Mnenie [13.5K]
3 years ago
8

App Holdings is expected to pay dividends of $1.50 every six months for the next three years. If the current price of App Holdin

gs stock is $22.60, and App Holdings' equity cost of capital is 18%, what price would you expect App Holdings' stock to sell for at the end of three years
Business
1 answer:
Y_Kistochka [10]3 years ago
8 0

Answer:

The answer is $34.36

Explanation:

FV = PV x (1 + R x ((1 + r))^T =  $22.6 x (1 + {($1.5 / $22.60) x [1 + (18% / 2)]}^6 = $34.36

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IN A MARKET EQUILIBRIUM THE QUANTITY OF GOODS DEMANDED IS EQUAL TO THE QUANTITY OF GOODS SUPPLIED MAKING THE ECONOMY TO HAVE NO UNCONSUMMATED WEALTH-CREATING TRANSACTIONS.

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