1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Evgen [1.6K]
3 years ago
14

Precision Engineering recently announced that its next annual dividend will be $1.20 per share with later dividends increasing b

y 2.5 percent annually. What is the current value of this stock to you if you require a 12 percent rate of return?
Business
1 answer:
Alexus [3.1K]3 years ago
3 0

Answer:

The current value of the  stock  is $12.63

Explanation:

price of a share

P_{t} = \frac{D_{t} }{R - g}  ... 1  

                                     where, P_{t} = price of a stock at t years

                                      D_{t} = dividend at year t

                                       R= rate of return from market

                                       g = growth rate of dividend

substituting into equation 1

P_{t} = $1.2 ÷ 12% - 2.5%

    = $1.2 ÷ 0.095

    = $12.6316

     = $12.63

You might be interested in
The reserve requirement is​ 10%. Suppose that the Fed ​$ worth of U.S. government securities a bond​ dealer, electronically the​
victus00 [196]

Answer:

D. The money supply decreases by ​$150,000.

Explanation:

Note: This question is not complete as some figures are omitted. The full question is therefore presented first before answering the question as follows:

The reserve requirement is​ 10%.

Suppose that the Fed sells ​$150,000 worth of U.S. government securities from a bond​ dealer, electronically debiting the​ dealer's deposit account at Reliable Bank.

Which of the following correctly describes the immediate effect of this transaction on the money​ supply?

A. The money supply decreases by ​$1,500,000

B. The money supply decreases by ​$135,000.

C. There is no change in the money supply.

D. The money supply decreases by ​$150,000.

E. None of the above.

The explanation to the answer is now provided as follows:

This is an example of Open market operations (OMO).

Open market operations (OMO) is a monetary policy strategy in which the central bank such as the Federal Reserve sells or purchases government securities in order to implement a particular monetary policy.

When the central bank sells government securities on the open market, it aims to reduce the money supply by the worth of the securities. This is called a contractionary monetary policy.

On the other hand, when the central bank purchases government securities on the open market, it aims to increase the money supply by the worh of the government securities. This is called an expansionary monetary policy.

From the question, the sale of ​$150,000 worth of U.S. government securities from a bond​ dealer is a contractionary monetary policy and it will reduce the money supply by exactly $150,000.

Therefore, the correct option is D. The money supply decreases by ​$150,000.

8 0
3 years ago
Why is it important to use positive language in business messages​
nasty-shy [4]

It is more important to use positive language in business messages because positive language sends a better appearance rather than sending a business message with negative language.

8 0
3 years ago
Read 2 more answers
Interpret the following statement: "An increase in the price of wheat will encourage farmers to
Maksim231197 [3]

Answer:

A. The statement is correct.

Explanation:

According to the law of supply, there is a positive or direct relationship between the price of wheat and the quantity of wheat supplied i.e if the price of wheat is increases then the quantity of wheat supplies is also increases and if the price of wheat decreases then the quantity of wheat supplies is also decreases that represents the direct relationship between the price and the quantity supplied

Hence, the first option is correct

6 0
3 years ago
Honduras is a small economy in central america. it keeps a fixed exchange rate with the us. capital is perfectly mobile. you may
rosijanka [135]

Answer:

Given that Honduras is a small economy in Central America, and it keeps a fixed exchange rate with the US, and capital is perfectly mobile, but interest rates are three percent in the US and six percent in Honduras, the explanation of the difference in these interest rates are as follows:

Honduras has a higher interest rate, meaning that its sovereign bonds pay higher values than the American ones, as well as its banks also pay higher interests on their investments compared to American banks.

This is so for a double reason: on the one hand, because the Honduran economy is less reliable than the American economy, which is larger and therefore more solvent and capable of overcoming eventual crises, with which the risk of default is less.

On the other hand, the Honduran economy is more dependent on foreign investment, so it must offer higher interest rates to attract such investments.

5 0
3 years ago
The Digby Company has just purchased $40,900,000 of plant and equipment that has an estimated useful life of 15 years. The expec
Igoryamba

Answer:

$4,908,000

Explanation:

The computation of accumulated depreciation expense for this purchase is shown below:-

Depreciation expense = ((Cost of machine - Salvage) ÷ Estimated useful life of machine)

= (($40,900,000 - $4,090,000) ÷ 15) × 2

= $36,810,000 ÷ 15 × 2

= $4,908,000

Therefore for computing the depreciation expense we simply applied the above formula.

6 0
3 years ago
Other questions:
  • How many times may customers use the same plate at a self service buffet ?
    13·2 answers
  • WP Corporation produces products X, Y, and Z from a single raw material input in a joint production process. Budgeted data for t
    12·1 answer
  • Full meaning of NeRsA
    15·2 answers
  • 1) Household spending on goods and services is known as A) consumption spending. B) planned investment spending. C) government p
    6·1 answer
  • A company's financial statements may contain errors even if debits and credit balance because:
    14·1 answer
  • The collection of an account that had been previously written off under the allowance method of accounting for uncollectibleA. w
    8·1 answer
  • Free pointsvguf dhscjbf hcjn
    11·2 answers
  • You decide to become a neurosurgeon. After high school, you will need four years of college, four years of medical school, five
    12·1 answer
  • WILL MARK BRAINLIEST!!!!   How would you feel if you lived in a country where there was no freedom of the press? Would you follo
    12·2 answers
  • A. State and describe the concept that leads to "conflict of goals between a firm's managers and its shareholders. Give a modern
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!