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lara31 [8.8K]
2 years ago
11

Achi Corp. has preferred stock with an annual dividend of $ 3.22. If the required return on​ Achi's preferred stock is 8.4 %​, w

hat is its​ price? ​(​Hint: For a preferred​ stock, the dividend growth rate is​ zero.)
Business
2 answers:
Anton [14]2 years ago
5 0

Answer:

Explanation:

The dividend growth rate can be defined as the annualized percentage change that an investment’s dividend undertakes during the span of a particular period of time. Growth rates can be based on whichever period and can be evaluated linearly by taking the average change over that particular period.

the step by step calculation can be seen below:

Required rate of return = ( D1 / P0) + g

P0 = D1 / Ke - g

Current price = $3.22 / 0.084 - 0

= $38.34

price of stock is $38.34

Elza [17]2 years ago
3 0

Answer:

The price of the stock is $38.33

Explanation:

The dividend growth is zero on a preferred stock thus its dividends are just like a perpetuity as the stocks have no defined life. The formula for the price or value of a perpetuity or the zero growth model is,

P0 = D / r

Where,

D is the dividend

r is the required rate of return

Thus, the price of the stock is:

P0 = 3.22 / 0.084 = $38.33

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vfiekz [6]

Answer:

False

Explanation:

A positioning strategy should focus on solidifying brand identity. Therefore, the ideal is for the brand to seek positioning based on the perception of its potential consumer, strengthening the benefits, quality, price and applications added to the product that sets it apart from competitors. In this strategy it is not effective to want to reach many markets at the same time, but to delimit your target market and thereby achieve competitiveness gains and influence that the product or brand has for your customer.

3 0
2 years ago
Jennifer purchased a prepaid card for transit fares and highway tolls. what kind of card did she purchase?
scoundrel [369]
<span>It's a stored value card. This is a type of card that is credited or stored with certain amount of money for specific purposes. The amount saved in the stored value does not reflect in Jennifer's checking account, so even if by any means she is robbed or misplaces the card, her personal savings will still be intact.</span>
4 0
3 years ago
Assume you own and operate a small advertising business that employs 25 people. With increased health care costs and related ins
Tcecarenko [31]

Answer: (C) Safety and security needs

Explanation:

  The Safety and the security needs are one of the type of Maslow's hierarchy model that helps us to protect from the job security, safe and the healthy environment. The safety and the security are the basic physiological needs that is necessary for survival to each person.

 According to the given question, the decision made by an organization may cause the employees concerned about their safety and the various types of security requirement as employees can concentrate on given task in the healthy work environment only.

 It is also helps in increase the productivity as well as growth of the business and an organization. Therefore, Option (C) is correct answer.      

 

5 0
3 years ago
Assume you are now 25 and you want to have a million dollars by the time you are 65. if you can earn 6% per year, compounded ann
Trava [24]
You would have to invest 97,222
97222*6=5833.32 + 97222= 103055.32 Year one
103055.32*.06= 6183.32 = 109238.64 Year two
109238.64*.06= 6554.32= 115792.96 Year three
115792.96*.06= 6947.58 = 122740.54 Year four

3 0
3 years ago
Slick Sam has a special relationship with his banker. The nature of the relationship is as follows: The bank owes Sam $100 per y
kodGreya [7K]

Answer:

X=97.24

Explanation:

PV = Present Value = X+2000 by the 16th years

PMT = Payments = $100

FV = Future Value = 2000 at the end of 16 years

n= number of years

Applying the equation of future value for annuity

FV = pmt* ​((1+r)ⁿ - 1   )/r

Inputting the values;

2000=100*((1+r)¹⁶-1)/r

Solving for r, gives r = 2.9%

Therefore using the formula for PV for annuity;

PV=PMT*(1-(1/1+r)/r)

X=100*(1-(1/1.029)/0.029

X=100*((1-0.9718)/0.029)

X=100*(0.0282/0.029)

X=97.24

4 0
3 years ago
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