Answer:
The correct choice is C)
The most logical thing to do would be to calculate the value of the stock in 5 years time.
Explanation:
This speaks to ones understanding of dividend growth stock valuation models. These tools are used to establish a fair value for a stock by discounting the present value of its future dividends. A commonly used model is the constant growth dividend discount model.
The formula for the DDM, which assumes constant growth in dividends, is provided below.
P0 = D1/(r-g)
Where,
P0 = intrinsic value of stock
D1 = dividend payment one year from today
r = discount rate
g = growth rate
Identifying the correct answer entails establishing a timeline of the expected cash flows. We are given the following information:
t0 = $0
t1 = $0
t2 = $0
t3 = $0
t4 = $0
t5 = $0.20
t6 = $0.20 * 1.035
Given a rate of return, we could use the constant growth dividend discount model to establish the fair value of the firm at t5 (five years from today). Incidentally, to determine today's value, we'd discount it back another five years.
Based on the information above, we are able to prove that the answer is '5'.
Cheers!
21 tasks, if you use your lunch break and your 2 15 minute breaks
Certificates of Deposit are documentation indicating an investor has given a bank an interest-bearing loan. The money market instrument known as a "certificate of deposit" is one that banks and other similar financial organisations issue to raise capital on the secondary market.
A certificate of deposit is documentation indicating an investor has lent money to a bank, the government, a corporation, or another bond issuer at interest. A certificate of deposit is documentation indicating an investor has lent money to a bank, the government, a corporation, or another bond issuer at interest.
A savings account known as a certificate of deposit (CD) holds a fixed sum of money for a predetermined length of time, such as six months, a year, or five years. One of the most crucial factors is the certificate of deposit's maturity period.
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<span>The sum of all the federal deficits over time is known as the "national debt".
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National debt refers to the total of all exceptional debt owed by the government. It incorporates the cash the legislature has obtained, as well as the interest it must pay on the acquired cash. The administration strays into the debt when it doesn't gather enough income to cover the costs it brings about from spending on projects, for example, the military, or building streets and extensions. The incomes originate from corporate and salary charges, and the expenses the legislature forces, for example, for visas and travel permits, student loans, and admission to national parks.
Answer:
Many large corporations want to become more like small businesses because they want to make their firm more flexible, resourceful, innovative, and competitive. ... For businesses based off the internet, they are able to adapt to market changes quickly.
